Government Spending on Education, Economic Growth and Long Waves in a CGE Micro-Simulation Analysis: The Case of Nigeria
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Date
2011-09
Authors
Odior, E.S.O.
Journal Title
Journal ISSN
Volume Title
Publisher
British Journal of Economics, Finance and Management Sciences
Abstract
This paper analyses the dynamic (direct and indirect) effects of government policy on education and its relation to the cyclical economic growth in the long run. The basic objective is to simulate if government expenditure on education would help to improve economic performance in Nigeria in the long run-2015. The paper used an integrated sequential dynamic computable general equilibrium (CGE) model to examine the potential impact of increase in government expenditure on education in Nigeria. The model is calibrated with a 2004 social accounting matrix (SAM) data of the Nigerian economy. The result shows that the re-allocation of government expenditure to education sector is significant in explaining economic growth in Nigeria. This paper therefore recommends that in order to achieve a steady economic growth, investment in education service should receive the highest priority in the public investment portfolio. The policy implication of the study is that, the Nigerian government should be able to move resources from other sectors to provide quality education for her citizens. This type of expenditure not only has a large impact on poverty per Naira spent, but also produces greatest growth in human productivity. The study concludes that if government policy is going to substantially increase growth, then future expenditure has to be pro-growth. Investing in education is one of the pro-growth policies for promoting economic growth.
Description
Keywords
Government Expenditure , Education , Economic Growth , CGE
Citation
Odior, E.S. (2011) “Government Spending on Education, Economic Growth and Long Waves in A CGE Micro-Simulation Analysis” The Case of Nigeria, British Journal of Economics, Finance and Management Science, (BJEFM) Vol. 1(2), United Kingdom, Pp, 74 – 87