Topic > Education and Economic Growth of Pakistan

This paper addresses the effect of education on economic growth. Studies education as a factor of economic growth and sustainable development. The objective is to reveal the relationship between education and economic growth. This study explores the correlation between education and economic growth in Pakistan using time series data on real gross domestic product and education from 1980 to 2014. Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an original essay The results of this study indicate that there is a positive relationship between education and economic growth. The effects of primary and secondary education are included in this paper. The findings of this article reveal that among these levels of education, generally higher education, i.e. secondary education, causes high and significant economic growth. This study recommends greater investment in the education sector so that economic growth can be further accelerated, which in turn, leads to higher education and thus economic growth. The progress and prosperity of a country depends on the educational choices available to the masses. Education not only prepares young people to understand and deal with the complexities of economic growth, but also serves as a lever for its improvement. It guarantees the quality of human life which ensures the socio-economic growth of a country. Asian countries such as South Korea, India and China have achieved extraordinary economic growth in recent decades through agricultural and educational reforms. Education is generally considered a powerful tool for reducing poverty, increasing economic growth, empowering people, improving private earnings, promoting a flexible and healthy environment, and creating a competitive economy. It plays a critical role in shaping how future generations learn to navigate the complexities of economic growth. Educational institutions prepare citizens to be able to participate actively in all areas of life, including economic activities. Human capital has proven to be one of the most important determinants of sustainable economic growth and therefore development. The positive and significant contribution of human capital through education development is well recognized. Most studies on education and productivity testify to their significant positive correlation. Education plays an important role in the formation of human capital. It increases the productivity and efficiency of individuals and thus produces skilled manpower capable of leading the economy towards the path of sustainable economic development. Education is considered one of the key indicators of development. The Human Development Index, an index that measures socioeconomic development, is based on the combination of measures of education, health and adjusted real income per capita. This shows that education is an important development measure. Education is also an important measure of multidimensional poverty. Increasing education has a direct effect on the growth of the economy and therefore leads to sustainable development. To strengthen human capital, a country must provide education to its population. Many countries have placed greater emphasis on developing an education system capable of producing workers capable of operating in new industries, such as those in the fields of technology and science. This is partly because older industries in developed economies were becoming less competitive and were therefore less likely to continue to dominate the industrial landscape. Furthermore, a movement has emergedto improve the basic education of the population, with a growing belief that all people have the right to education. Countries where a larger share of the population attends and graduates from school experience faster economic growth than countries with less educated workers. As a result, many countries provide funding for primary and secondary education in order to improve economic performance. In this sense, education is an investment in human capital, similar to an investment in better equipment. According to UNESCO and the United Nations Human Development Programme, the ratio of the number of children of formal secondary school age enrolled in school to the number of children of formal secondary school age in the population (called the enrollment rate ), is higher in developed countries than in developing ones. This differs from education spending expressed as a percentage of GDP, which is not always strongly correlated with the educational level of a country's population. Therefore, a country that spends a high percentage of its GDP on education does not necessarily make the country's population more educated. Since independence, Pakistan has faced numerous challenges. These challenges represent obstacles on the path to economic growth and development. Pakistan has suffered immensely from this fragmented education system, coupled with problems of access, quality and governance. Pakistan's primary and secondary school enrollment rates in 1991 were 46 and 21 percent across age groups – only half the average for all low-income countries. Only about half of those who enrolled in school stayed through fourth grade, compared to an average of about two-thirds for all low-income countries. Within the South Asian region, Pakistan lags far behind its neighbors in terms of enrollment; Net primary school enrollment rates are 50% in Pakistan, 75% in Bangladesh, 77% in India and 100% in Sri Lanka. By all criteria, Pakistan's education system was at the bottom of the international scale. The gender gap in education in Pakistan suggests that the country has forgone a great opportunity by not capitalizing on the high rates of return of women's education on economic productivity. In a study of estimates of wage ratios for males and females separately over different time periods using household income and expenditure surveys, it was found that women had higher rates of return than their male counterparts. Some estimates suggest that the return from putting more girls in school could be more than 20%. Another study estimates that annual per capita income growth could have been nearly a percentage point faster if Pakistan had closed the gender gap as quickly as East Asia between 1960 and 1992. The Pakistan has thus missed economic opportunities that have been exploited by many developing countries by raising education levels for the majority of its workforce and, therefore, increasing family incomes and reducing poverty. What is even more worrying is that low net enrollment rates will make it even more difficult to achieve 100% literacy levels in the future. This has serious implications for Pakistan's competitiveness and rapid poverty reduction. Education is one of the most powerful tools for reducing poverty. and inequality and lays the foundation for sustained economic growth. The literature on economic growth provides significant evidence of the importance of human capital accumulated by education.Education, one of the most important ingredients of human capital, is considered an important determinant of sustainable economic growth. Productivity can be increased by investing more in education. Human capital is the key component for increasing productivity leading to greater economic growth (Lucas, 1988; Romer, 1990). Human capital directly or indirectly serves as a determinant of economic growth. Education as a component of human capital improves socioeconomic factors. Education has multidimensional impacts on humans and the economy. It positively affects economic growth and employability of people, but on the other hand it also helps shape the behavior of society to promote a friendly political, social and economic environment that provides the basis for further domestic and foreign developments.investments in the country. As one of the most important components of human capital, improvements in educational status are a source of significant increases in individual earnings with contributions to working life such as increased productivity, and therefore wages and job opportunities of individuals, while the risk of unemployment has decreased. (Mercana; Sezer, 2014). Mehmet Mercana and Sevgi Sezerb test the effect of education spending on economic growth using the bounds testing approach on annual data from 1979-2012. They therefore conclude that improvements in educational attainment positively affect economic growth by increasing both labor productivity and knowledge production capacity. A country's economy becomes more productive as the percentage of educated workers increases because educated workers are able to more efficiently perform tasks that require literacy and critical thinking. As stated previously, more educated workers tend to be more productive than less educated ones. However, obtaining a higher level of education also comes at a cost. A country does not need to provide a large network of colleges or universities to benefit from education, it can provide basic literacy programs and still see economic improvements. There are several approaches to the relationship between education and education expenditure and growth in the literature. Among these, in the neoclassical approach, economic growth is expressed with the human capital factor included in the model and the role of human capital is highlighted in the process model of income differences between countries and convergence (Gms, 2005:100). According to some, economics, the economic approach is accused of intellectual imperialism, while the economist approach is increasingly used by researchers to analyze phenomena and behaviors outside this scope: education, bureaucracy, politics, the story. The fact that the economic approach to explaining human behavior is extremely fertile is demonstrated by the research performance of Nobel Prize winner in economics Gary S. Becker. Muhammad Afzal, Hafeez Ur Rehman, Muhammad Shahid Farooq and Kafeel Sarwar in their 2011 study on education and economic growth in Pakistan test the cointegration between education and economic growth was studied using ARDL approach and the causal link between education and Economic growth was examined in bivariate, trivariate and tetraborate TYAGC framework. The causality between education and economic growth was examined in the presence and absence of physical capital stock and labor stock as third and fourth variables. The causality results indicate that there is bidirectional causality between education and economic growth and between all levels of education and economic growth in the case of the bivariate TYAGC framework. The concept of human capital.