Education and Its Impact in Economic Growth in Lower Middle Income Countries

Abstract

Abstract The objective of this paper is to link and assess the relationship between investment in education and economic growth in the of low middle income countries in Europe including Russia and Turkey for e period between 2000 – 2017 , and the effect of some of the main variables associated with this investment, such as government expenditure on education as percentage of total government expenditure; government expenditure per student on tertiary education as percentage of GDP and school enrollment on tertiary education. As a technique is employed a Hausman Taylor model with instrumental variables (IV) , to show the regression results of relationship between investment in education and GDP growth in surveyed countries. Also, for comparison reasons the paper shows the results from pooled OLS, fixed effects and random effects. Results from this empirical research shows a positive impact on government’s investment in tertiary education, while school enrollment in tertiary education has a negativ effects in GDP growth in low middle income countries in Europe. The study is original in nature and makes effort to promote investment in education in low middle income European countries, including Russian Federation and Turkey. The findings of this study will be of value to governments of above mentioned countries.