Education and economic growth in South Africa: an empirical investigation

Abstract

PurposeThis paper examines the dynamic causal relationship between education and economic growth in South Africa using annual time-series data from 1986 to 2017. The study attempts to answer one critical question: Does education, which is one of the priority sectors in South Africa, drive economic growth?Design/methodology/approachThe study uses the ARDL bounds testing approach and ECM-based Granger causality model to examine this linkage. The study also uses three proxies to measure the level of education. In addition, the study uses two variables: investment and labour, as intermittent variables between the various proxies of education and economic growth, thereby creating a system of multivariate Granger-causality models.FindingsThe study finds that the causal relationship between education and economic growth in South Africa is dependent on the variable used to measure the level of education. In addition, the causality tends to change over time. Overall, the study finds the causal flow from economic growth to education to supersede the causal flow from education to economic growth.Originality/valueUnlike some previous studies, the current study uses three proxies of education in South Africa and two intermittent variables in a multivariate setting. To our knowledge, this may be the first study of its kind to examine in detail the dynamic causal relationship between education and economic growth in South Africa – using the ARDL bounds testing approach and a multivariate Granger causality model.

Faktor-Faktor yang Mempengaruhi Pertumbuhan di 60 Kabupaten/Kota Sumbagsel Tahun 2017-2021

“…Sejalan dengan penelitian Handayani, penelitan (Marquez-Ramos & Mourelle, 2019) dan (Akbar et al, 2021) menunjukan hasil bahwa Kesehatan juga tidak berpengaruh positif pada Pertumbuhan Ekonomi suatu daerah dikarenakan masih banyak faktor lain yang belum terpenuhi seperti ketimpangan pembangunan, ketidakmerataan distribusi pendapatan, dan sebagainya. Sejalan dengan hal tersebut, menurut (M. Odhiambo, 2020), justru pertumbuhan ekonomi yang yang berpengaruh positif pada Kesehatan. Sebaliknya, menurut (Muda dkk,2017) Kesehatan berpengaruh postif pada pertumbuhan ekonomi.…”

Assessing the effect of education levels on economic growth in South Africa

“…Required critical skills for South African economic growth are expected to source from the education sector. Furthermore, the significance of the considered role of the education sector is justified by the annual budget allocated to the sector (Odhiambo, 2020). Between 2001 and 2022, each year, the South African government spends more than 18 percent of the gross domestic product (GDP) on education (Macrotrends, 2022).…”