Title

Education and Economic Growth: What Makes Investment Effective?

Document Type

Student Presentation

Presentation Date

4-18-2016

Faculty Sponsor

Mike Touchton

Abstract

The purpose of this research is to understand if secondary education investment affects economic development and, if so, under what circumstances. In his research, Erik Hanushek argues that investment in education to ensure quality of education is essential to growth, and quality at a higher level of academic achievement also yields greater economic growth. With this in mind, secondary education expenditure by governments should positively relate to economic growth.

I am examining under what circumstances secondary education expenditure has a statistically significant affect on economic growth by adding measures of regime type, property rights, levels of human development, corruption, and civil liberties to Hanushek’s equation as alternative explanatory variables. These results, if statistically significant, should be reflected in individual household income. For example, if I find that, statistically, education expenditure positively affects economic growth in democracies with property right protection, I should expect to see a rise in the individual household income of an individual with secondary-level education living in a democratic society in which property rights are protected. To illustrate this, I have chosen four middle-income countries against which I will measure my statistical analysis.

I anticipate a negative relationship between secondary education investment, economic growth, and corruption. Additionally, I expect secondary education investment to affect economic development in democratic regimes, where property rights and civil liberties are legally protected, corruption is low and human development is high.

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