Abstract:
The purpose of this is to examine the relationship between components of educational
expenditure and economic growth. The study considered the impacts of expenditure
on tertiary, secondary and primary education on economic growth. The study
employed quantitative research design to analyse relationship between educational
expenditure and economic growth in Ghana. The study employed annual time series
data spanning from 1980 to 2019. Data was sourced from World Development
Indicators (WDI) 2020, Globaleconomy.com, Ghana Statistical Service (GSS) and
Bank of Ghana (BoG). The study tested for unit root and co-integration to ascertain
the existence of stationarity and long run relationship among the variables. Based on
the result of the unit root test, ARDL and Error Correction (EC) model was adopted.
The result shown that there exists long run relationship between components
government educational expenditure and economic growth. The study found that
expenditure on primary education was statistically insignificant in the long run. The
result indicates that in the long run, government educational expenditure (secondary
and tertiary), through its impact on human capital, significantly and positively
influence economic growth and this means that education contributes meaningfully to
the long-term growth of Ghana’s economy. It was found that the impacts of
expenditure on tertiary education on economic growth is greater than the impacts of
expenditure on secondary education on economic growth. The study further revealed
that there exists uni-directional granger causality between government education
spending and economic growth. That is, it was found that only educational granger
causes economic growth but economic growth does not granger cause education
expenditure. The study recommend that government should encourage more spending
on tertiary education in the form of scholarship to tertiary students, spending on
research and developments which will in the long run increase productivity and hence
economic growth. Inter-relationships between government expenditure and education
quality should be taken into account when formulating education policy to promote
economic growth in Ghana.
Description:
A dissertation in the Department of Economics Education,
Faculty of Social Sciences, Submitted to the School of
Graduate Studies, in partial fulfillment
Of the requirements for the award of the degree of
Master of Science
(Economics Education)
in the University of Education, Winneba
DECEMBER, 2020