Does education spur economic growth? Fresh insights from Uganda

Abstract

This paper uses autoregressive distributed lag bounds testing approach to examine whether education and economic growth are related, making use of time series data from Uganda covering the period from 1986 to 2017. The findings reveal evidence of a short- and long-run relationship between education and economic growth in Uganda, indicating that education matters for economic growth in both the short- and long-run, all else equal. In the long-run, it’s secondary school enrolment that is the most significant contributor to economic growth relative to primary and tertiary school enrolments. However, in the short-run, it’s tertiary school enrolment that is the most significant contributor to economic growth. This relationship is robust to the use of alternative specification. The implications of the above findings are far reaching. The presence of a positive relationship between education and economic growth suggests that attaining short- and long-run rates of economic growth might require making substantial investments in education to improve and encourage school enrolments. Specifically, enacting policies that provide incentives for learners to remain in school rather than drop out of school could offer a ray of hope for increasing growth, for low-income countries like Uganda.