The impact of education expenditure on economic growth in Uganda

Abstract

This paper focused on the long-run relationship and causality between government expenditure in education and economic growth in Ugandan economy. Time series data was used for the period 1986 to 2016 obtained from authorized sources. In order to achieve the objective, an estimation of Vector Auto Regression (VAR) method is applied. Findings from the study show that economic growth (GDP) positively co-integrated with selected variables namely Gross University Enrollment, Gross secondary School Enrollment, Gross primary School Enrollment, employment levels and Gross fixed capital formation. It is found that the economic growth is a short-term Granger cause for education variable and vice versa. Furthermore, this study has proven that human capital such as education variable plays an important role in influencing economic growth in Uganda. The research therefore recommends that more investment should be put in education and that government should focus on the development of education at all levels