The Effect of Government Educational Expenditure on Turkish Labor Productivity A Bound Testing Approach

Atakan Durmaz, Hakan Pabuçcu

Abstract


Labor productivity is very important phenomena to maintain the sustainable economic development. As a matter of fact, there are many studies in the economic literature about determining the factors affecting labor productivity. At this point, this study aims to investigate the relationship between labor productivity and educational expenditure by using the data covering the period of 1971-2015 for Turkey. To this aim, we apply autoregressive distributed lag model (ARDL). By using the bound testing approach, we investigate the short-long run relationship between variables. The empirical findings indicate that the effect of educational expenditure on labor productivity is significantly negative in short run and insignificantly positive in long run. On the other hand, the effect of GDP growth on the labor productivity is significantly positive in both short and long run. While the effect of average annual labor worked hours is significantly negative in short run it is significantly positive in long run.


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