Education and Economic Growth in Algeria: An Empirical Investigation by Using ARDL Approach

Copyright © 2014 ISSR Journals. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. ABSTRACT: The purpose of this paper is to examine the short and long run relationship between education variables and economic growth in per capita Real GDP in the case of Algeria’s economy. Following a brief outline of the theoretical discussions on the nexus between economic growth and human capital formation through education, first we present some observations for the Algeria Country. The bounds testing approach to cointegration and error correction models, developed within an autoregressive distributed lag (ARDL) framework is applied to annual data for the period 1971 to 2011 in order to investigate whether a long-run equilibrium relationship exists between the major education categories and economic growth. The result of the bounds test indicates that there is a stable long-run relationship between primary school, university and economic growth. The estimated results show that primary school and university are positively related to the Economic Growth in the Long and short run. The paper concludes that the efforts to improve the quality of education in Algeria have significant contribution to the economic growth