An Empirical Study on the Relationship between Education and Economic Development Based on PVAR Model

Zhenzi Sun,Baiyuan Ding

doi:10.1155/2021/6052182

Abstract

In order to effectively analyze the dynamic relationship between education and economic development, an empirical study on the relationship between education and economic development based on the PVAR model is proposed. This article expounds on the principles, assumptions, identification, and estimation methods of the PVAR model, takes the education level and economic development level as the research object, explains the corresponding variables, and selects the indicators. Using Cobb–Douglas production function as a theoretical model, this article analyzes the theoretical relationship between the education level and economic development level. Based on this theoretical relationship, this article makes an empirical analysis on the relationship between education level and economic development level using the PVAR model. The results show that, on the whole, economic development can drive the development of education, but there are obvious regional differences in the impact of economic growth on the development of education. The impact of economic growth in the eastern region on education is significantly higher than that in the central and western regions. There is an interactive relationship between education level and economic development level, and there is a certain incubation period for education level and economic development level to play their role.

Highlights

As a major undertaking involving the national economy and the people’s livelihood, education affects the inheritance of a country’s national culture and spiritual wealth and the sustainable and healthy development of a country’s economy and society [1,2,3]
The education level in most areas lags behind the local economic development level, which does not give full play to the role of education in promoting economic development and seriously hinders the further development of the local economy [13,14,15]. erefore, this article proposes an empirical study on the relationship between education and economic development based on the panel data vector autoregressive model (PVAR) model
The Cobb–Douglas production function is used to analyze the theoretical relationship between education level and economic development level so as to provide a theoretical basis for empirical analysis

Summary

Introduction

As a major undertaking involving the national economy and the people’s livelihood, education affects the inheritance of a country’s national culture and spiritual wealth and the sustainable and healthy development of a country’s economy and society [1,2,3]. Most of the existing quantitative studies focus on the longterm impact and indirect contribution of education to economic growth and follow the idea of education ⟶ improvement of labor quality⟶economic growth. Eoretically, the investment in education and increasing education expenditure will inevitably directly drive the development of the tertiary industry. Erefore, this article proposes an empirical study on the relationship between education and economic development based on the PVAR model. Based on the theoretical analysis results of the PVAR model, the two variables of education level and economic development level are explained and the indicators are selected. The Cobb–Douglas production function is used to analyze the theoretical relationship between education level and economic development level so as to provide a theoretical basis for empirical analysis

Theoretical Basis of PVAR Model

Empirical Research

Area West

Result Analysis of PVAR Model

Conclusion