The impact of education on economic growth: The case of Turkey

In this study, the long run relationship between the education expenditures and the economic growth is analyzed for Turkey by using ARDL bound test approach with the pluannual data covering the years 1960-2016. While GDP growth rate is used to represent economic growth , the share of education expenditures in GDP is used as the educational variable. Also control variables are included in the analysis such as the share of gross capital formation in GDP, the share of imports and exports in GDP and annual inflation rate. According to the analysis results, there is a significant and positive long run relationship between the share of education expenditures in GDP and economic growth. In addition, it is found that there is a statistically significant and positive long run relationship between gross capital formation and economic growth, while the share of imports and exports in GDP and the annual inflation rate both have statistically significant and negative long run relationship with economic growth. Therefore, increasing education expenditures will be useful to contribute to economic growth in Turkey. The majority of funding in education is currently being provided by public resources. Because of this reason, it would be appropriate to develop implementations for increasing other funding resources and effective use.