Page 4 - Azerbaijan State University of Economics

THE JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE, V.77, # 1, 2020, pp. 4-18

SECONDARY EDUCATION, ECONOMIC GROWTH AND
FINANCE

1
Rza Mammadov , Erdal Gümüş 2
1 Dr. Eskişehir Osmangazi University, Institute of Education, Educational Administration,
Planning, Supervsion and Economics, e-mail: rza_mammadov@hotmail.com
2 Prof. Dr. Eskişehir Osmangazi University, Faculty of Economics and Administrative
Sciences, Department of Finance, e-mail: egumus@ogu.edu.tr

Received 10 November 2019; accepted 14 February 2020; published online 10 July 2020

ABSTRACT:
The purpose of this research is to determine the relationship among education,
education finance and economic growth on the basis of secondary education. In the
research, the number of students enrolled in secondary education is the indicator of
education, net government education expenditures per student is the education finance
variable and per capita GDP is the growth variable. The research included on 30
countries participating in the PISA 2015 exam. The data cover between the years
1998-2015. Since the study has unit and time data, panel model was preferred and
cointegration test was applied. DOLS and FMOLS methods were used to estimate the
coefficients. Our findings suggest, there is a negative relationship between education
and education finance across the panel. However, there is a mutual positive
relationship between 'finance and growth' and 'education and growth'. In countries that
have higher scores than the OECD average, the situation is the same as that of the
overall panel. In countries that have lower scores than the OECD average, it has been
obtained no relationship between growth and education. According to the results we
get before the crisis of 2008, education finance affects both education and economic
growth negatively. At the same time economic growth only has a positive effect on
education finance. Likewise, we were found a positive relationship between education
finance and economic growth after the crisis of 2008. This relationship is mutually
positive. This study contributes to do relevant literature on the fact that secondary
education is financed by the public, reducing the inequality of opportunity in
education and contributing to human capital positively affecting economic growth.

Keywords: Secondary Education, Economic Growth, Finance, Panel Analysis, PISA 2015

Jel classification:A20, C33, H52, I22, N30

1. INTRODUCTION
The relationship between education and the economy has a long history. Education
in the Mercantilist period was seen as a means of developing the skills and abilities

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