Do Education Levels Matter on Indonesian Economic Growth

Bibliographic Data

ID2434465
AuthorsDavid Mendy (Universitas Gadjah Mada), Tri Widodo (0000-0003-4228-6134, Universitas Gadjah Mada)
Year2018
Volume11
Issue3
Pages133-146
Publication date2018-09-01
Open AccessYes
TypeARTICLE
VenueEconomics & Sociology (JOURNAL)
Journal identifiersISSN: 2071-789X • E-ISSN: 2306-3459
PublisherCentre of Sociological Research, Szczecin, Poland (PUBLISHER • PL)
DOI10.14254/2071-789x.2018/11-3/8
OpenAlexW2897510338
LanguageEN
Citations received3
References cited3

Arising from the questions "Would all types of human capital affect economic growth identically? And which type of schooling -primary, secondary, or tertiary -should public policy promote?", this study examines the nexus between different educational levels and Indonesia's economic growth over a reference period 1984-2014. During this period, education expansion took place at all three levels of education reflecting structural changes tied within the policies under the Millennium Development Goals (MDG's) as the key and powerful factor for sustainable economic development. The study applies the augmented Lucas endogenous growth model and employs the autoregressive distributed lag model. The empirical analysis reveals a long-run relation between education and economic growth. The estimated long-run and short-run elasticity of different education levels reveal that, overall, human capital structure in Indonesia is still at the stage of promoting economic growth and identifies tertiary education as the main level for development. The findings reveal that education level matters to economic growth. Further, the empirical evidence helps shed light on why empirical studies have failed to find a significant relationship between schooling and economic growth.

Development economics · Economics · Indonesian · Economic Growth and Development · Economic Growth and Productivity · Fiscal Policy and Economic Growth · Philosophy

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Open DOIOpen Access