The Relationship between Education, Economic Growth and Unemployment: Evidence in Eastern Europe

Year 2019, Volume: 4 Issue: 1, 55 - 72, 25.05.2019

Nguyen Anh Tru

Abstract

The
article attempts to examine the causal relationship between government
expenditure on education, tertiary enrolment, economic growth and unemployment
of six emerging countries in Eastern Europe between 1998 and 2017 using a
vector autoregressive model. We found that government expenditure on education
has positive relationships with tertiary enrolment and GDP per capita. The
increase of tertiary enrolment contributes to reducing unemployment rate.
However, the proportion of tertiary enrolment should be effectively controlled
and managed because this generates reduction of government expenditure on
education and GDP in Eastern Europe. Economic growth negatively affects
government expenditure on education. However, there is no co-integration among
variables in the long run. Lastly, policies are recommended to achieve a
sustainable development in Eastern Europe. 

Keywords

Economic growth, Unemployment, Eastern Europe

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