Education Expenditure and Average Income in Countries Around the World

Abstract

This study investigates the relationship between government expenditure in education and growth measured through gross domestic product per capita. The other variables that were considered include unemployment rate, foreign direct investment net inflow, savings, exports and agriculture. Expenditure on Education exhibited a positive and significant relationship in many different multiple regression models. One important thing to consider in this research is that many of these variables have a relationship with GDP per capita but there is no way to determine causality. GDP per capita could change as result of different variables or it could have an effect on the variables. Education expenditure has a relationship with GDP per capita according to this research, however, it is not known whether expenditure on education has an effect on GDP or the reverse.