Do Time Series Analyses Provide Consensus About The Relationship Between Education And Economic Growth?

Abstract

This paper examines the causal relationship between education and economic growth by investigating and comparing the time-series literature, and making a short empirical analysis for Turkey about this issue. The aim of examining this topic is that the role of human capital is very significant for economic growth and it can be said that the most important factor for human capital is education. In other words, the accumulation of human capital may be seen as a major force of generating economic growth because it not only increases productivity but also has some positive externalities which society can benefit from. The study also touches on different levels of education and education investments (or expenditures) while investigating the causality between education and economic growth. On the other side, the results in the literature about the causal relationship between education and economic growth are not uniform. Also in empirical part, this study finds different results compared to other studies related with Turkey. Moreover, in the literature the results vary even for the same country. For these reasons, this work recommends panel data analysis that uses the qualitative side (cognitive skills) of education in order to examine the causal relationship between education and economic growth because with this way, we can handle the problem of lack of data, especially for developing countries, as the number of countries in the sample increases. However, the important thing here is to create a sample with analogous countries.

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