The Impact of Public Education Spending on Economic Growth in ASEAN Countries
Keywords:
Education, economic growth, government budget, ASEANAbstract
The main objective of the paper is to examine the relationship between public spending on education sector and the economic growth in ASEAN nations over the period from 1995 to 2018. Furthermore, this study also investigated how the government budget distribution, particularly on education, impacts on the education quality which measured by achieving the compulsory education at nationwide level in context of other macro variances. While the Logarithmic Multiple Regression Model and Musgrave and Rostow model (2013) were applied to analyze the link between the public spending and the economic growth based on the time series data from 2000 to 2017, the Vector Auto regression (VAR) Model was employed to highlight the role of government budgeting activities in boosting the education quality. In addition, the Unit root test, Johansen Co-integration test and Causality test have been performed to verify the integration order of the variables as analytical techniques. As a lack of data, in the scope of this article, the discussion does not have intention to draw a picture of the attribute structure of education expenditures for each level of the teaching system or evaluate their influences. This study found that government spending on education and economic growth in ASEAN countries is positively and significantly related and the appropriate level of investment in education did support the promotion of the education quality, particularly maintaining the targeted literacy rate in long-run. Thanks to these findings, the paper concludes with a discussion of challenges and some recommendations that expected to be founded other factors to produce quality education by which eventually raises the countries’ economic growth.
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