Relationship between higher education level and GDP per capita of different American States

Abstract

Education has long been considered a vital factor that determines a person’s income level. This paper aims to explore if this effect still exists after being magnified to a state-wide scale, and, if it still does, the extent to which this effect can be observed. The percentage of the population aged 25 or older that are bachelor’s degree holders, by state, is used as a measure of the education level of a state, and this paper attempts to find the relationship between this value and GDP per capita of a state. Furthermore, this paper takes other variables into account, which are unemployment and urban population, to better model the effect of education on GDP per capita.