Effects of different levels of education and government spending on economic growth

This study investigates the impact of the level of education and education spending on economic growth in the Southern African development community (SADC) using annual panel data from 1995 to 2017 using the FMOSLS and DOLS cointegration estimators. Three levels of education are identified in study (primary, secondary and tertiary). Moreover, we create an index of government spending on education corresponding to these three levels of education. The empirical results suggest that there is a positive long-term relationship between secondary education and economic growth but not for other levels of education. Moreover, it is found that only government spending at primary and secondary education contribute to economic growth. The causality analysis for confirm that only secondary education affects economic growth and is affected by government spending on education. Policy implications of the study are discussed. Government should be careful in managing the public spending on education in a way to increase the skilled labor. Education Policies must be drive based on principle. Professional schools must be first priority in education policies in the region. Government should direct the public expenditures on education towards productive sectors that will contribute in improving the standard of living contributing so on economic growth.Thesis (MCom) -- Faculty of Business and Economic Sciences, Economics, 202