Education Attainment and Economic Growth of Asian Developing Countries

The purpose of the study is to examine the long-run relationship of economic growth and education in the developing countries of Asia from 1991 to 2015 by following Barro and Lee approach. The econometric strategy indicates long-run relationship between public spending on education and education achievement based on Cobb-Douglas production function with intuition of Solow Augmented Growth Model. In addition, the study attempts to deal with the potential endogeneity by using Generalized Method of Moment (GMM) technique. Findings provide increase economic growth with higher budget allocation in education; however, contradict the assumption of Solow Augmented Mankiw-Romer-Weil for population growth rate. The study finds robust estimates for economic growth determining by life expectancy rate and purchasing power parity as well as by examining heterogeneity among countries classified into subsamples. The findings present valuable recommendations to increase human capital investment in education for policy makers