Page 6 - Azerbaijan State University of Economics

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

the framework of both the "Human Capital Model" of Lucas (1988) and the "Public
Policy Model" of Barro (1990). The results are expected to shed light on the
development of educational policies of countries.

The research consists of an introduction, literature review, method, findings,
discussion and conclusion. In the literature review, studies examining the relation
between education and economy are included. The method of the research is
explained. In the following section, there are findings of the research. Then,
comparison of the findings with the literature is presented in the discussion section.
Finally, conclusion and suggestions are brought forward at the last chapters.

2. LITERATURE REVIEW
Studies on the relationship between education and economic growth have been
carried out both national and on an international basis. Denison's (1962) study is
accepted as a pioneering study on this subject. Between the years1909-1957, the
increase of the GDP in US tried to reveal the effects of production factors. The
number of employees and the increase in physical capital in the findings of
Denison's research are insufficient to explain the entire increase in national income.
This residual factor, he has accepted employees' quality improvement. According to
the results obtained, the quality increase in education has a 23% share in the increase
of the GDP of the US. Studies that examined the impact of education on economic
growth stepped up in the 1960s. In this regard, Becker (1964) states that education’s
to be ‘the engine of economic growth’. At the same time, Becker (1992) argues that
countries with a limited number of other inputs in the production function will grow
faster thanks to their investments in human capital.

In accordance with the purpose of the research, the relationship between education and
economic growth is presented here on the basis of secondary education. Keller (2006)
analysed the relationship between education and economic growth using data from 107
developing and developed countries between the years 1960 and 2000. In the research,
he used the schooling rate, total education expenditure by the public, education
expenditure per student and GDP per capita. According to the research findings, public
education expenditures per student positively affect economic growth. At the same time,
the enrollment rate is the most important factor affecting economic growth.

Afzal, et al. (2012) investigated the relationship between education and economic
growth based on data from four South Asian countries (Bangladesh, India, Pakistan
and Sri Lanka) between the years 1995 and 2013. According to the research findings
used in the panel model, population policies play an important role in ensuring the
sustainability of economic growth. On the other hand, according to the study of

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