Investing in future: education for sustainable growth in Egypt

Abstract

Purpose – This paper investigates the relationship between education and economic growth in Egypt, with a particular focus on the role of education within the framework of Sustainable Development Goal (SDG) 4 (Quality Education). Given Egypt’s demographic structure and development priorities, this study aims to evaluate how educational indicators contribute to economic performance and sustainable development. Design/methodology/approach – This study adopts a mixed-methods approach. First, it assesses recent trends in key education indicators to evaluate progress toward SDG 4. Second, it uses the Autoregressive Distributed Lag model using quarterly-transformed time series data from 2002 to 2023 to empirically examine the long- and short-run relationships between education variables (enrollment rates and education expenditure) and economic growth, while controlling for investment and inflation. Findings – The results reveal a statistically significant long-run relationship between education and economic growth. However, the impact varies across education levels: secondary education shows a negative effect, suggesting possible misalignment with labor market needs, while primary education has an insignificant but positive association. Moreover, government expenditure on education appears to have a marginally negative effect on growth, raising concerns about spending efficiency. These findings highlight persistent structural challenges in Egypt’s education system, particularly regarding quality and financing. Originality/value – This paper contributes to the literature by linking education quality and sustainable development within a country-specific context, using a robust time series econometric framework. It provides policy-relevant insights for Egypt and similar developing countries on how to better align education systems with national development goals and labor market demands.