Higher Education and Economic Growth. A Comparison between Czech Republic and Romania

Abstract

Although there is a strong theoretical framework for the economic growth and its relationship with education, the empirical evidence of this relationship is rather scarce. In this paper we investigated the causality and the long-run relationship between economic growth and higher education in the Czech Republic and Romania, using data series for 1980-2013 period. We used a VECM to analyse the long-run relationship between higher education and economic growth and Granger methodology to test the causality between variables. The results showed that higher education has an important positive effect on economic growth, although the impact level of the higher education on economic growth is different in the two countries. We also showed that there is a causality relationship that goes from higher education to economic growth for both countries.

Student Enrolment and Output Effects in Poland: 2SLS and VAR Estimates

“…If compared with the 2SLS estimates, the VAR/VEC estimates imply only a slightly weaker positive educational effect on GDP in 2000−2016, while outcomes seem to be somewhat asymmetrical for the specification with industrial production. Responses of indt and yt to innovations in st in our estimates for Poland are very similar to those obtained by Oancea, Pospíšil, and Drăgoescu (2017) for the Czech Republic, although a short-lived negative effect on impact is somewhat similar to estimates for Romania. a) industrial production b) GDP Following the argument of Otsuka et al (2017), among others, a growing role of higher education in the 2000-2017 period in respect to industrial production in the VAR/VEC estimates could indicate the ability to better utilise the existing technology gap.…”

“…Among Central and Eastern European (CEE) countries, positive effects of higher education appear in the Czech Republic and Romania (Dragoescu, 2015;Oancea, Pospíšil, & Drăgoescu, 2017). The same lack of favourable mutually reinforcing causality that runs from economic growth to higher education can be seen in Sweden (Obradović & Lojanica, 2016), Japan, the UK, France (De Meulemeester & Rochat, 1995), and Greece (Pegkas & Tsamadias, 2014).…”

A Nexus among Institutions, Education and Economic Growth: An Analysis of Developing Countries

“…One view is that there is a significant and positive relationship between education and economic growth. Mincer (1984); Galor and Tsiddon (1997); Asteriou and Agiomirgianakis (2001); Baldacci, Clements, Gupta, and Cui (2008); Isola and Alani (2012); Oancea, Pospíšil, and Drăgoescu (2017) argued that stock of human capital (education) is a key determinant of economic development. Krueger and Lindahl (2001) found a positive connection between education (average years of schooling) and economic growth after adjusting for measurement error.…”

Education and economic growth in South Africa: an empirical investigation

“…Studies whose findings are consistent with the education-led growth hypothesis include studies like De Meulemeester and Rochat (1995), Chuang (2000), Asterioua and Agiomirgianakis (2001), Self and Grabowski (2003), Grabowski (2004), Jaoul (2004), Sari and Soytas (2006), Beskaya et al (2010), Katircioğlu (2010), Danacica (2011, Pegkas and Tsamadias (2014), Sari and Soytas (2006), Aka and Dumont (2008), Mallick and Dash (2015), Oancea et al (2017), Marquez-Ramos andMourelle (2019), among others. De Meulemeester andRochat (1995), for example, while examining the causal link between higher education and economic development in six developed countries, found the existence of a significant causality from higher education to economic development in four countries -Japan, the United Kingdom, France and Sweden.…”

“…Mallick and Dash (2015), in examining the casual relationship between expenditure on education and economic growth over the period 1951 to 2012, found that unidirectional causality runs from expenditure on education to economic growth in India. Oancea et al (2017), while comparing the relationship between higher education and economic growth in the Czech Republic and Romania, using data series for the period 1980-2013, found that higher education Granger-causes economic growth for both countries. More recently, Marquez-Ramos and Mourelle (2019) examined the relationship between education and economic growth in Spain during the period 1971-2013.…”