The effect of education on economic growth in Greece over the 1960–2000 period

Abstract

This paper examines the impact of education on economic growth in Greece over the period 1960–2000 by applying the model introduced by Mankiw, Romer, and Weil. The findings of the empirical analysis reveal that education had a positive and statistically significant effect on economic growth in Greece over the period 1960–2000. The econometric model explained up to 66% of the variation of the economic growth rate through the variation of the independent variables (physical capital, human capital, and labor). More specifically, when the coefficient of education is estimated using time lags, the contribution of the annual differences of human capital growth to the annual differences of GDP growth has been estimated from an annual 0.64% up to 0.81%.

Keywords:

• education
• human capital
• productivity
• economic growth

Acknowledgements

We would like to thank Prof. G. Donatos and Prof. G. Mergos for their insightful comments on this paper.

Notes

AMECO database (European Commission) and Bank of Greece.

In all examined cases the Serial Correlation LM test and the White Heteroskedasticity test have been run. They have both verified that there is no first- and second-class correlation problem as well as no heteroskedasticity problem in the error terms, respectively.