An ARDL Approach to Investigating the Link between Education Spending and Economic Growth in Egypt

Abstract

In this paper, we explore the correlation between public spending on education and economic growth in Egypt. The paper seeks to shift the narrative surrounding education from a service to an investment. The study employs the Autoregressive Distributed Lag (ARDL) co-integration technique using time series data from 1996 to 2022. The findings support previous research indicating a positive and significant long-term relationship between education spending and GDP growth at a 5% significance level. While the short-term relationship is negative, the highly significant negative error correction term (ECT) suggests that the whole model adjusts toward long-run equilibrium at a speed of 48%. The study concludes with recommendations for the variables examined and considers the broader context.