This study examines the relationship between economic growth and the expansion of education in Pakistan. The study utilizes 2SLS and GMM estimators to estimate the growth equations with a potential issue of endogeneity using data for the period 1973-2018. Empirical results show that educational expansion at the primary and secondary level effect economic growth positively. The evidence is quite compelling that the effect of educational expansion on economic growth is low due to the poor quality of education. Also, the lower effect of physical capital is due to lower human capital embodied in the labor force. Keywords: human capital; economic growth; GMM; Endogeneity; Pakistan. JEL Classification: O47, I21, C26

This study identifies the determinants of household expenditures on education in four provinces of Pakistan. The household survey data are used to identify the factors that affect household's decision to spend on education. Lognormal hurdle model is employed which suggests that household income, gender and age of household head, awareness about education, school going children and rural urban residence affect household expenditures on education. Household expenditures on education are income inelastic implying that households consider education as an importance and necessary budget item. This elasticity is different in magnitude for Punjab, Sindh, KPK and Balochistan. The concavity of relationship between household expenditures and age of household head is evident. Female heads spend more on education than their male counterpart. Rural households invest less than urban households in education. Moreover, educational awareness, number of school going children also have positive effect on household expenditures on education.