RELATIONSHIP BETWEEN HIGHER EDUCATION AND ECONOMIC DEVELOPMENT: EVIDENCE FROM WEST VIRGINIA

Saman Janaranjana Herath Bandara

The International Journal of Business and Finance Research, 2023, vol. 17, issue 1, 93-104

Abstract: Investment in education is the key for economic growth of a country or a state where poverty is very prominent. Many studies have proven that human capital makes a substantial contribution to economic and income growth. Education that generates skilled labor force leads to increased development and improved quality of life i.e., economic development. This study investigates the effects of higher education on the economic labor force and income growth of the state for the last 2-3 decades, 1990-2023. The data collected mainly from the U.S. census Bureau, Bureau of labor statistics, West Virginia Higher Education Policy Commission (WVHEPC), USDA-ERS, City Data Book (C&CDB), and some from Appalachian Regional Commission (ARC) were used for the analysis. The key industrial sectors of the state are considered for the analysis separately to understand the labor force effects on those sectors. The study followed a series of simultaneous equations with three endogenous variables, using an annual state-level dataset. The results show that higher education has positive and significant effects on economic development in West Virginia, while investing in professional and business services, education and health care are delivering more results.

Keywords: Education; Economic Development; West Virginia (search for similar items in EconPapers)
JEL-codes: O1 O2 O4 (search for similar items in EconPapers)
Date: 2023
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