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Public expenditure on education and economic growth: evidence from North Macedonia
[journal article]
Abstract In this paper, we studied the impact of public education expenditure on GDP per capita in North Macedonia from 1991 to 2020. The main questions we examined were: 1) What is the relationship between public education expenditure and GDP per capita in the country in the short run?; 2) Does a long-term ... view more
In this paper, we studied the impact of public education expenditure on GDP per capita in North Macedonia from 1991 to 2020. The main questions we examined were: 1) What is the relationship between public education expenditure and GDP per capita in the country in the short run?; 2) Does a long-term relationship between the aforementioned variables exist?; and 3) What are the policy implications? This research was based on the Auto-Regressive Distributed Lag (ARDL) model, originally developed by Pesaran et al. (2001). The empirical estimations produced interesting findings. In the short run, the relationship between public spending on education and GDP per capita in North Macedonia was negative and statistically significant. The long-term relationship between the variables remained negative but statistically insignificant. These results were robust and consistent with results from earlier empirical studies. The results suggested that government expenditures on education did not contribute to economic growth in North Macedonia in the analyzed period, ceteris paribus. We concluded that, from a public policy standpoint, intervention in the education system's financing is necessary to facilitate the transformation of education expenditures into productive human capital and enhance the nation's economic development.... view less
Keywords
Macedonia; public expenditures; gross domestic product; education; economic growth; education system; funding
Classification
Macroanalysis of the Education System, Economics of Education, Educational Policy
Public Finance
Free Keywords
public education expenditure; GDP per capita; North Macedonia; ARDL
Document language
English
Publication Year
2023
Page/Pages
p. 22-34
Journal
Journal of Liberty and International Affairs, 9 (2023) 1
ISSN
1857-9760
Status
Published Version; peer reviewed