Abstract
The main approaches to the analysis of the impact of education on economic growth consist in assessing the link between economic growth indicators (GDP/GDP growth per capita) and three groups of educational indicators: quantitative ones (educational attainment – coverage of population by an education level), qualitative ones (standardized grades of students) and the amounts of educational funding. At the same time, educational attainment and the quality of knowledge obtained depend on the amount of educational funding. The article proves that there is a significant positive relationship between indicators of state funding of higher and secondary education per student and a country's total factor productivity. At the same time, there is no unified optimal scheme for the distribution of public funding between the educational levels: to accelerate the pace of economic growth, some countries prioritize primary education, others – secondary or higher education. As stated in the article, this depends on the country's technological level, the existing educational and professional structure of human capital, and such contextual factors, as the quality of institutions in the country. The article discusses practical approaches to financing various levels of education at the expense of public and private funds, where the latter are presented in the context of private funds, and state transfers to families with students – that is public-to-private transfers. The article concludes that public educational funding – both direct and in the form of public-to-private transfers – concidered at various levels, indicates prioritization of the specific educational and professional composition of human capital. The results of the study indicate the need to harmonize approaches to budgetary processes in the field of educational funding with a country's technological, qualificational, and institutional prerequisites, as well as with strategic forecasts of the socio-economic development of national economies.
Highlights
Been a challenge for monetary, fiscal, social and other policies, as well for the international financial and non-financial organizations, is becoming important
Given that the fiscal space of countries is shrinking under the pressure of new shocks and the extraordinary costs of immediate measures in response to the COVID-19 pandemic come to the fore, educational funding is threatened with decline, especially in developing countries
Educational level of the population and the quality of acquired knowledge depends on the amount of public funding of education, whose ratio in total financing remains dominant
Summary
The main approaches to the analysis of the impact of education on economic growth consist in assessing the link between economic growth indicators (GDP/GDP growth per capita) and three groups of educational indicators: quantitative ones (educational attainment – coverage of population by an education level), qualitative ones (standardized grades of students) and the amounts of educational funding. The purpose of this article is to study approaches to public funding of various levels of education in the context of creating preconditions for economic growth in countries with different indicators of technological development and educational composition of human capital, as well as practical recommendations concerning those approaches' transformation at a time of technological change. A more detailed assessment of the impact of public funding of education on economic growth involves analysis of the structure of human capital and determination of the country's distance to the world technology frontier [18]. This means that pre-school, primary and secondary education provide a critical foundation for vocational, higher and lifelong learning, which is so much needed in the face of technological change These transformations of knowledge, skills and experience project on educational financing approaches that differ in levels. The current trend is to expand the boundaries of public sector's participation in financing early childhood development – both via direct provision of preschool education and via direct and indirect support for families with children [26]
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