Open AccessThe Relationship Between Education Outputs, Education Expenditure, and Economic Growth in Saudi Arabia
Author(s) -
Houcine Benlaria,
Messen Kerroumia,
Emad Abdel KhaleK Saber El-Tahan,
Tarig Osman Abdallah Helal
Publication year - 2021
Publication title -
research in world economy
Language(s) - English
Resource type - Journals
eISSN - 1923-399X
pISSN - 1923-3981
DOI - 10.5430/rwe.v12n2p320
Subject(s) - distributed lag , economics , per capita , public expenditure , gross domestic product , demographic economics , real gross domestic product , autoregressive model , econometrics , development economics , macroeconomics , demography , public finance , sociology , population
The present study investigated the relationship between education outputs, Education expenditure, and economic growth in Saudi Arabia for the time period of 1986–2016. The results obtained after employing the Autoregressive Distributed Lag (ARDL) model revealed a long-term relationship between the studied variables, an inverse relationship between the number of graduates and growth in the long term, whereas a non-significant positive relationship appeared in the short -term. Findings indicate also that public spending in education has a positive and significant impact on economic growth in the long run. Furthermore, he observed that a 1% increase in public expenditure in education contributes 18% increase in GDP per capita in the long run. This is in line with economic theory and previous research showing that expenditure on education leads to a rise in GDP per capita and economic growth rates. The recommendations of this study are fundamental to the Kingdom of Saudi Arabia.