Investigating the Effects of Different Levels of Formal Education on Iran’s Economic Growth

Abdollah Ansari

doi:10.5539/mas.v10n9p205

Abstract

Human capital accumulation affects economic growth and education is one of the main elements of human capital. Different levels of formal education can leave different effects on economic growth. I used data from the time period of 1981-2013 and vector auto regression method to study the effects of different levels of formal education on Iran’s economic growth. The results showed that increasing schooling at elementary, secondary and higher education levels have a significant effect on growth and in the long run, employees with university degrees, those with secondary and primary school qualifications had the greatest impact on GDP growth, respectively.

Highlights

For many countries achieving a continuing high economic growth, which is measured by the GDP growth rate is and had been their quantitative objective. in this regard, economists have been–and still are- trying to identify those factors which can affect economic growth.Inadequacy of factors such as changes in the workforce and physical capital stock to explain the reasons for differences in economic growth rates in different countries led the scholars to consider human capital, as one of the contributing factors
This study has investigated the relationship between various educational levels and Iran’s economic growth, by using vector auto regression method and error correction model
The step in Vector Auto Regression models is to determine the optimal number of lags, with regard to the sample sizeand the number of variables

Summary

Introduction

For many countries achieving a continuing high economic growth, which is measured by the GDP growth rate is and had been their quantitative objective. in this regard, economists have been–and still are- trying to identify those factors which can affect economic growth.Inadequacy of factors such as changes in the workforce and physical capital stock to explain the reasons for differences in economic growth rates in different countries led the scholars to consider human capital, as one of the contributing factors. The 1980s witnessed extensive attention of scientific and academic circles to the issue of economic growth and it resulted in the development of theoretical foundations of economic growth and the importance of educational investment attracted special attentions. Important inference in this regard is based on the fact that education, in addition to increasing the productivity of trainees; it can promote the productivity of those individuals who have not received any education, through positive externalities. Judgment about the effectiveness of different educational levels requires different empirical studies and so in this article i have tried to answer to the following questions

Methods

Results

Conclusion