The impact of Education on Economic Growth in Palestine: 1990-2014

The objective of this paper is to measure the contribution of education to growth in per capita real GDP in Palestine over the period 1990-2014 by employing OLS estimation on the growth accounting formula. Over the period, per capita real GDP increased in a yearly average by about 3.6 percent. Of about 47 percent contributed by total employed labor and capital components to economic growth only about 11 percent was contributed by education through private-public enrollments ratio. Whilst it is expected that secondary school enrollments contribution to economic growth to be negative, markedly a more growth in graduate students in high institutions of universities and technical colleges related negatively with economic growth, due to the weakness of Palestinian economic sector under the prevailing conditions and to a lower productivity of labor. These findings have important implication for policy makers. To promote economic growth in coming years an improvement in quality of education is needed in basic, secondary education and in universities and technical colleges. Also, further spending on the economic sectors by both public and private sectors is required to employ more graduated students