bba economics
Relationship between Education and Economic Growth in Pakistan: A time series analysis.
Zaheer Khan Kakar, M.Phil Fellow, Department of Economics, National University of Modern Languages(NUML), Islamabad.
Dr Bashir Ahmad Khilji, Head Department of Economics, National University of Modern Languages (NUML), Islamabad.
Muhammad Jawad Khan, Lecturer, Department of Economics, Balochistan University of Information Technology, Engineering & Management Sciences (BUITEMS), Quetta.
Abstract
Education is one very important factor of human capital formation. The objective of this paper is to examine the long-run relation between education expenditures and economic growth in Pakistan. Time series data is used for the period 1980-2009 for analysis and co-integration and error correction models are used to determine the long and short run relationship of education and economic growth. In this study, an attempt is made to determine and analyse the educational trends policy, trends of education, and challenges and it role in economic development in Pakistan. The study also presents policy measures for education sector for human capital formation and escalates economic growth in Pakistan.
Keywords
Pakistan, human capital, education, Economic Growth. Time series, co-integration, error correction.
1. Introduction
Education is universally acknowledged a primary tool to promote economic development. It plays a fundamental part in developing human capital and escalates economic growth by improving skills, increasing competency, and productivity. The education brings benefits for the whole society and the individuals. For developing country like Pakistan, education plays a key role in poverty reduction, and removing both social and income inequalities.
This study focuses on the question that, "whether improvement in education sector brings improvement in economic growth in Pakistan. Generally, it can be said that education does effect the economic
Zaheer Khan Kakar, M.Phil Fellow, Department of Economics, National University of Modern Languages(NUML), Islamabad.
Dr Bashir Ahmad Khilji, Head Department of Economics, National University of Modern Languages (NUML), Islamabad.
Muhammad Jawad Khan, Lecturer, Department of Economics, Balochistan University of Information Technology, Engineering & Management Sciences (BUITEMS), Quetta.
Abstract
Education is one very important factor of human capital formation. The objective of this paper is to examine the long-run relation between education expenditures and economic growth in Pakistan. Time series data is used for the period 1980-2009 for analysis and co-integration and error correction models are used to determine the long and short run relationship of education and economic growth. In this study, an attempt is made to determine and analyse the educational trends policy, trends of education, and challenges and it role in economic development in Pakistan. The study also presents policy measures for education sector for human capital formation and escalates economic growth in Pakistan.
Keywords
Pakistan, human capital, education, Economic Growth. Time series, co-integration, error correction.
1. Introduction
Education is universally acknowledged a primary tool to promote economic development. It plays a fundamental part in developing human capital and escalates economic growth by improving skills, increasing competency, and productivity. The education brings benefits for the whole society and the individuals. For developing country like Pakistan, education plays a key role in poverty reduction, and removing both social and income inequalities.
This study focuses on the question that, "whether improvement in education sector brings improvement in economic growth in Pakistan. Generally, it can be said that education does effect the economic
References: Barro, R.J. (1991) ‘Economic Growth in a Cross-section of Countries’, Quarterly Journal of Economies, Vol.106, pp.407-443 Benhabib, J. and Speigel, M. (1994) ‘the Role of Human Capital in Economic Development: Evidence from Aggregate Cross-Country Data’, Journal of Monetary Economics, Vol.34, No.2, pp.143-173 Bils, M and Klenow (2000) ‘Does Schooling Cause Growth?’, American Economic Review, Vol.90, pp.1160-1183 De Meulmester, J.C. and Rochet, D (1995) ‘A causality analysis of the link between higher education and economic development’, Economics of Education Review, Vol.144, No.4, pp.351-361. Gemmell, N (1996) Evaluating the Impact of Human Capital Stocks and Accumulation on Economic Growth: Some New Evidence, Oxford Bulletin of Economics and Statistics, Vol.58, pp.9-28. Hanushek, E.A. and Kimko, D.D. (2000) ‘Schooling, labour force quality, and the growth of nations’, American Economic Review, Vol.90, No.5, pp.1184-1208. Ministry of Education. (2010) Statistical year book (2008-2009), Government of Pakistan. Islamabad, Available from: [accessed 29 March 2011]. Ministry of Finance (2010) Pakistan Economic Survey, Government of Pakistan, Islamabad, Available from: [accessed 29 March 2011] Rodriguez, F. and Rodrik, D (1999) Trade Policy and Economic Growth: a Skeptic Guide to the Cross-National Evidence, NBER Working Paper No.7081. State Bank of Pakistan (2010) Handbook of Statistics on Pakistan Economy 2010, Government of Pakistan. Islamabad, Available from: [accessed 29 March 2011].