afif-ibn-munir
This study examines how education expenditure influences Bangladesh's economic growth in the long-run. It fills a policy research gap regarding human capital investment's effectiveness, but the study tests whether the chosen macroeconomic variables would be I(0) and I(1) to show long-run stable, cointegrating relationships. Unit root tests [Augmented Dickey-Fuller (ADF) test and KPSS] were conducted on time-series data from 1998-2024, showing a mixed order of integration, where variables are I(0) and I(1). Thus, Autoregressive Distributed Lag (ARDL) Bounds Testing for cointegration is appropriate. ARDL is an appropriate test for mixed orders of integration and smaller sample sizes. The null hypothesis of long-run cointegration is confirmed at the .05 level by the F-statistic value of 10.52 (greater than the critical bounds value). Furthermore, the elasticity derived from education expenditure is statistically significant across all models at almost 0.99, which means that when education expenditure increases by one percent, GDP per capita increases by one percent in the long-run. Furthermore, a statistically significant Error Correction Term (ECT) value of −0.048 confirms that the error term is sustainable, meaning the economy corrects for 4.8 percent of its disparity every year. Therefore, these results provide extensive empirical support for the long-run approach of increased education expenditure as a valid approach to Bangladesh's economic growth in the future. This increases the likelihood that policymakers may want to move forward with increased education efforts to both level up and increase quality and quantity for best results.
