Abstract
Azerbaijan is an exporter country of natural resources (oil). Since the main power of modern economy including the future economic progress is human factor, human capital, its knowledge, ability of using technology, transferring oil capital into human capital is a driving factor. That’s why researching the influence of the main indicators of education and state budget allocations for it is a topical issue. The article has researched the relationship of state budget allocation and the main indicators of education and science during 21 years (1996−2017) in the Restate of Azerbaijan. Auto Regressive Distributed Lags has been used as a research model. Besides, stationary tests of variables (Augmented Dickey Fuller, Phillips-Perron, Kwiatkowski-Phillips-Schmidt-Shin) and Pairwise Granger Causality Tests were used. Model stability was studied. Eviews_9 software program was applied for making graphics and calculations. Research has examined that there is a positive dependency between state budget allocation and the main indicators of education. We recommend that state budget allocation for science and education can be increased and used as the intended purpose.
Highlights
Human capital is the main resource in economy
Each variable has been checked through three different unit root tests
The results indicate the absence of any instability of the coefficients because the plot of the cumulative sum of recursive residuals (CUSUM) and CUSUM of square (CUSUMSQ) statistic fall inside the critical bands of the 5% confidence interval of parameter stability
Summary
Human capital is the main resource in economy. The increasing role of human capital is related with geometric sequence rather than arithmetic sequence of events and processes. The 50−60s rapid development is related with the development of technologies, especially information and communication technologies and their employment on production spheres. The human capital plays important role for all of these. All these achievements are related with knowledge, science and education. Scientific and intellectual potential has become an important factor in the development of our country (İbrahimov et al 2019). Providing a reliable guarantee to the rapid economic development and to progressive reforms in all spheres of state life is important in Azerbaijan recently. Science and education serve to the cultural development of society and to improve the living conditions and welfare of people and to prevent the negative tendencies, acts of primitive thinking causing the eradication of social institutions since ancient times almost without administrative intervention. If we don’t consider the achievements of science and education, the facts itself show that countries with high levels of science and education witness fewer criminal cases
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