The Role of Education towards Economic Growth: Evidence from Indonesia

Vita Kartika Sari

doi:10.14710/jdep.5.3.221-228

DOI: https://doi.org/10.14710/jdep.5.3.221-228

The Role of Education towards Economic Growth: Evidence from Indonesia

Vita Kartika Sari

Universitas Sebelas Maret Indonesia, Indonesia

BibTex Citation Data :

@article{JDEP44341,
    author = {Vita Sari},
    title = {The Role of Education towards Economic Growth: Evidence from Indonesia},
    journal = {JURNAL DINAMIKA EKONOMI PEMBANGUNAN},
  volume = {5},
    number = {3},
    year = {2022},
    keywords = {education, economic growth, panel data.},
    abstract = {  Education is an important variable     in     economic activity since     competent human resources are originated from good quality education.     Human resources     are     primary input in   Neoclassical Production Theory  ,     so that     this research mainly aims to     estimate     the impact of     education,   labor  , and   foreign     direct     investment   towards the economic growth in Indonesia. The research data are in the forms of panel data     consisting of   34   provinces in Indonesia in the period of   2006   until 2  019  . The average length of school time is employed as the education variable,     the number of labor     as     the labor   variable  ,     and     foreign direct investment   as     capital   variable  . Based on the estimation results, the selected model for analysis is   random     effect     model  . The main findings indicate that education     is   proved to be significantly positive   towards     the formation of     gross regional domestic product  ;   every 1% increase in education   can     improve     economic   output     by 2.01%  .   Labor   and   foreign     direct     investment   are   also proved to be significantly positive   towards the   gross regional domestic product     in   Indonesia  .     Therefore,     it requires     strategic policies for quality-oriented education improvement and literacy program   to all corners of Indonesia   since education     is a long term investment.       },
   issn = {2620-3049},   pages = {221--228}  doi = {10.14710/jdep.5.3.221-228},
    url = {https://ejournal.undip.ac.id/index.php/dinamika_pembangunan/article/view/44341}
}

Citation Format:

Abstract

Education is an important variable in economic activity since competent human resources are originated from good quality education. Human resources are primary input in Neoclassical Production Theory, so that this research mainly aims to estimate the impact of education, labor, and foreign direct investment towards the economic growth in Indonesia. The research data are in the forms of panel data consisting of 34 provinces in Indonesia in the period of 2006 until 2019. The average length of school time is employed as the education variable, the number of labor as the labor variable, and foreign direct investment as capital variable. Based on the estimation results, the selected model for analysis is random effect model. The main findings indicate that education is proved to be significantly positive towards the formation of gross regional domestic product; every 1% increase in education can improve economic output by 2.01%. Labor and foreign direct investment are also proved to be significantly positive towards the gross regional domestic product in Indonesia. Therefore, it requires strategic policies for quality-oriented education improvement and literacy program to all corners of Indonesia since education is a long term investment.

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Keywords: education, economic growth, panel data.

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Section: Research Article

Language : EN

In Vol 5, No 3 (2022): DECEMBER

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