The Long-Run Relationship Between Education And Economic Growth. The Case Of Romania

Bogdan Oancea and Raluca Mariana

Business & Management Compass, 2015, issue 3, 5-19

Abstract: The relationship between education and economic growth is one of the central areas of research in economics but the empirical evidences of this relationship, especially the long-run relationship are scarce. In this paper we use a VECM approach to analyze the long-run relationship between education and economic growth in Romania during 1980-2012. We used data for GDP, gross capital formation, public education expenditure, the number of students enrolled in high-schools (ISCED level 3) and number of students enrolled in tertiary education (ISCED level 5). The data series were checked for stationarity using ADF and Philips-Peron tests. We showed that the data series are I(1) and usinga vector error correction model we find that the variables are cointegrated. We estimated the cointegration equation using Johansen-Juselius procedure and show that education has a significant impact on economic growth. Data processing was done using Eviews.

Keywords: education; economic growth; cointegration; unit roots; causality (search for similar items in EconPapers)
JEL-codes: C5 I25 (search for similar items in EconPapers)
Date: 2015
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