The relationship between economic growth and eucation in Albania

Albania as a middle-income country has faced an ongoing economic growth even though economic crisis have stroked world’s economy. The economic growth itself explains at the same time the increase in a nation’s welfare by all means of it. However our main focus is the effect that education level of individuals has on the economic growth of Albania. Literature review states that investment in education directs into the formation of a qualified human capital, compared to physical or social capital and that makes a significant contribution to economic growth. So the study will briefly explain the reasons behind the economic growth of Albania and the education in this country between the years 1994-2011 by showing a detailed way of how this effect has contributed in the overall growth of economy. Thus, in order to explain the before mentioned relationship of the importance of education in economic growth of Albania, supporting the theoretical findings we will execute various econometric analyses such as Unit Root Test, Cointegration, Granger Casuality Test and at last VAR analasys using the EViews. 5.0 package