An Examination of the Relationship between Educational Level and Economic Growth in Indonesia

M. Ergyandi Barokha; Septriani Septriani

doi:10.55927/fjmr.v4i6.250

Authors

M. Ergyandi Barokha Universitas Bengkulu
Septriani Septriani Universitas Bengkulu

DOI:

https://doi.org/10.55927/fjmr.v4i6.250

Keywords:

Literacy Rate, Average Years of Schooling, Education Expenditure, Economic Growth

Abstract

This study aims to analyze the effect of education on economic growth in Indonesia using panel data on 34 provinces from 2019 to 2023. The method used is panel data regression analysis, with independent variables including literacy rate, average years of schooling, and government spending on education. The dependent variable in this study is gross regional domestic product. The results showed that literacy rate, average years of schooling and education spending simultaneously had a significant effect on economic growth in Indonesia. Furthermore, partially, the literacy rate variable has a significant negative effect on economic growth. While the average length of schooling and education expenditure variables have a negative effect on economic growth in Indonesia. This study provides evidence that investment in education can be a catalyst for economic growth, hence the government should continue to improve the quality and access to education as a long-term strategy for sustainable economic development.

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