Public Expenditure for Education and Economic Growth in Vietnam

Abstract

This research provides empirical evidence of impact of public expenditure for education on economic growth in Vietnam from 2000 to 2015. In addition, effect of human capital quality is also attacted into the research to examine its impact on economic growth. Specifically, for relating performance of government expenditure for education, we choose enrolment number of pre-primary school, enrolment number of primary school, enrolment number of lower secondary school, enrolment of upper secondary school, percentage of high school graduation as education’s performance. Moreover, we aslo estimate the impact of percentage of government expenditure of GDP for health on GDP growth. Firstly, we estimate the relationship of government capital and regular expenditure for education, its performance mentioned above and human capital quality (HDI as proxy). Secondly, we test the impact of all explanatories of model 1 including HDI plus percentage of government expenditure of GDP for health on GDP growth. Consequently, the first model shows that enrolment number of pre-primary school and regular government spending for education have positive relationship with HDI, whereas, capital spending for education shows negative relationship. For the second model, enrolment number of lower secondary school, enrolment number of primary school, capital expenditure of public budget for education, and HDI are related positively to GDP growth. On the other hand, enrolment number of pre-primary school, percentage of high school graduation, and regular spending for education move negatively way with GDP growth.

Keywords: HDI, government expenditure, GDP growth, enrolment

DOI: 10.7176/JESD/11-6-06

Publication date:March 31^st 2020