Education Expenditure and Economic Growth: Some Empirical Evidence from Côte d’Ivoire

Abstract

There are many recent studies on African countries about the relationship between education expenditure and economic growth. However, the case of Côte d’Ivoire has been so far neglected. The aim of this paper is then to investigate that relationship for Côte d’Ivoire for the period from 1970 to 2015. We applied the Pesaran et al. (2001) bounds testing approach, estimated an ARDL model and used the Toda and Yamamoto (1995) causality test. The study provides evidence of the existence of a negative and significant long term effect of government education expenditure on economic growth for the aforementioned period. Moreover, there is a non-significant positive effect of government education expenditure on economic growth in the short term. The results show a unidirectional causality relationship between the two variables, running from education expenditure to economic growth. These findings are consistent with some results in the empirical literature and, first, indicate that government education expenditure does not stimulate economic growth in Côte d’Ivoire. This may be due to low levels of government education expenditures and the inefficiency with which these expenditures are converted into human capital stock and thus into economic growth. Second, policies aiming to invest more in education are important for more production and more economic growth.

Keywords: ARDL bound test, Causality, Education expenditure, Economic growth.