The Effects of Education on Economic Growth
Dr. Sarah Estelle
There are strong reasons why education can help promote economic growth that do not always bear out in empirical research. Models, including both the Solow and Romer growth models, attempt to predict economic growth with many considering the effects of investments in human capital. I hypothesize that educational investments in developing countries have a significant positive impact on economic growth, but differ by region. Studying education and economic growth is important for determining why some developing countries are not keeping pace with others and influencing government policy toward education. According to the Global Monitoring Report from the World Bank, several developing counties invest only slightly more than 3 percent of their Gross National Income in education, less than the world average of 5.1 percent. Using data from the World Bank, this research tests the effects of various education indicators on economic growth using regression analysis including country fixed effects.
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