Do Education Expenditures Really Contribute to TFP? Evidence from Turkey


  • Mehmet Akif Destek Gaziantep University
  • Sercan Aydın


Education, Total Factor Productivity, Capital, Trade


This paper aims to examine the impact of education expenditures on total factor productivity in Turkey. For this purpose, the relationship between education expenditures, capital, trade openness, and total factor productivity is investigated with the ARDL bound test procedure for the period from 1970 to 2017. Before observing the short and long-run parameters, the stationary properties of variables are checked with a unit root test that allows structural break, and obtained break data is used as a dummy variable in the empirical model. Our results show that education expenditures and capital accumulation contribute to total factor productivity in the short-run. In the long-run, the effect of education expenditures has become statistically insignificant. However, capital accumulation positively affects productivity in the long-run.


Al-Yousif, Y. K. (2008). Education expenditure and economic growth: Some empirical evidence from the GCC countries. The Journal of Developing Areas, 69-80.

Bandyopadhyay, D., King, I., & Tang, X. (2019). Human capital misallocation, redistributive policies, and TFP. Journal of Macroeconomics, 60, 309-324.

Habib, M., Abbas, J., & Noman, R. (2019). Are human capital, intellectual property rights, and research and development expenditures really important for total factor productivity? An empirical analysis. International Journal of Social Economics.

Hussin, M. Y. M., Muhammad, F., Hussin, M. F. A., & Razak, A. A. (2012). Education expenditure and economic growth: a causal analysis for Malaysia. Journal of Economics and Sustainable Development, 3(7), 71-81.

Idrees, A. S., & Siddiqi, M. W. (2013). Does public education expenditure cause economic growth? Comparison of developed and developing countries. Pakistan Journal of Commerce and Social Sciences (PJCSS), 7(1), 174-183.

Liu, J., & Bi, C. (2019). Effects of Higher Education Levels on Total Factor Productivity Growth. Sustainability, 11(6), 1790.

Mallick, L., Das, P. K., & Pradhan, K. C. (2016). Impact of educational expenditure on economic growth in major Asian countries: Evidence from econometric analysis. Theoretical & Applied Economics, 23(2).

Mercan, M., & Sezer, S. (2014). The effect of education expenditure on economic growth: The case of Turkey. Procedia-Social and Behavioral Sciences, 109, 925-930.

Pesaran, M. H., Y. Shin, & R. Smith (2001). Bounds testing approaches to the analysis of level relationships. Journal of Applied Econometrics 16(3): 289–326.

Rathanasiri, R. A. (2020). Impact of public education expenditure on economic growth in Sri Lanka: Evidence from econometrics analysis. Journal of Management Matters, 51.

Sunde, T. (2017). Education expenditure and economic growth in Mauritius: An application of the bounds testing approach.

Tamang, P. (2011). The impact of education expenditure on India’s economic growth. Journal of International Academic Research, 11(3), 14-20.

Tomić, Z. (2015). Analysis of the impact of public education expenditure on economic growth of European Union and BRICS. Economic analysis, 48(1-2), 19-38.

Urhie, E. S. (2014). Public education expenditure and economic growth in Nigeria: a disaggregated approach. Journal of Empirical Economics, 3(6), 370-382.

Wahab, A. A. O., & Kefeli, Z. (2017). Modeling the Effect of Healthcare Expenditure and Education Expenditure on Labour Productivity: A Study on OIC Countries. Journal of Business and Economics Review (JBER), 2(2), 31-37.

Wei, Z., & Hao, R. (2011). The role of human capital in China's total factor productivity growth: A cross‐Province analysis. The Developing Economies, 49(1), 1-35.

Zivot, E. & D. W. K. Andrews, 1992, “Further Evidence on the Great Crash, the OilPrice Shock and the Unit Root Hypothesis.” Journal of Business and Economic Statistics 10, 251-270.




How to Cite

Destek, M. A., & Aydın, S. (2020). Do Education Expenditures Really Contribute to TFP? Evidence from Turkey. Journal of Financial Economics and Banking, 1(1), 52-56. Retrieved from



Research Letters