Measuring the Contribution of Education: New Evidence from Economic Growth Empirics of Pakistan

Abstract

In this study, we examine the education effects on economic growth in Pakistan. Secondary data from the period of 1989-2020 is used. Results implied that education is necessary for economic growth which contains selfconfidence, skills of the workforce, knowledge which have significant effects on development and growth. By using the two variables as Literacy and GDP this study is using vector Autoregressive model (VAR). This study is using the Granger Causality test considering lag lengths 2, 3, and 4 to estimate the model. According to the result in 2 and 3 lengths, no relationship is found between Literacy rate and GDP. In the lag length, 4 literacy rate causes GDP, but the probability in the third result was 0.04 which was less than 0.05