Abstract
Though there is an existence of writings on human capital and its relationship to growth, but it has missed the economic impact of universities. It is known that the knowledge of economy has a positive role in achieving economic development. So my paper focuses on the role of education expenditure in achieving economic development. The human resource is the basis for growth and development because it is able to achieve the appropriate scientific achievement and its future economic performance which is a positive return. The improvement in performance of skilled workers will be affected if Saudi government increases the education expenditure in addition to the investment in human capital. From here we can say that the human resources and the universities (government education expenditure) are two sides of a single coin whose basic and sole objective is economic growth. Therefore, this paper will test the relationship between education expenditure and economic development during the period from 2003 to 2019 through a theoretical analysis of the relationship of higher education to economic development. To explore the relationship between spending on education and economic development the author used econometric technique to analyze the study by using multi regression model depending on weighted least square (WLS). The study results show that there is a significant relationship between Saudi education expenditure and economic development, but regarding to R & D expenditure it is not significant. So the author excluded it from the model due to lack of data. Furthermore, the model WLS is effective to explore results and relations between dependent and independent variable in the case of Saudi Arabia.
Highlights
There is no doubt that development is a necessary requirement for all societies, as the various developed and developing countries depend on same approach, and this will only be achieved through the role of educational institutions
These studies, which showed a link between economic growth and increase in the level of human capital, highlighted the role of education in development
There is no doubt that the University has a prominent role in identifying the problems facing society
Summary
There is no doubt that development is a necessary requirement for all societies, as the various developed and developing countries depend on same approach, and this will only be achieved through the role of educational institutions. Universities have an effective role in promoting societies to achieve sustainable development through relying on scientific research and its various applications to create a kind of social and economic progress. This is in addition to the increasing role of educational institutions in general and the universities in particular through the expertise of their professors and their faculties in the continuous improvement of education and simulation of developed countries and continuous training for their students, which will automatically return to the country after the graduation of their students and their training in the labor market.
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