Abstract:
This study examines the relationship between education expenditure
and economic growth in Mauritius. The study employed the ARDL bounds
testing methodology for the period 1976 to 2016. The study found that
education expenditure Granger causes economic growth in Mauritius in the
short run. In addition, the study also found that economic growth does not
Granger cause education expenditure in Mauritius in the short run. However,
in the long-run, the study found that there are long run relationships between
education expenditure and economic growth in both equations; and this
means that an increase in either of the variables will eventually lead to an
increase in the other variable. The study, therefore, found support for the
hypothesis that investment in education raises economic growth. This means
that Mauritius has the potential to benefit from further investments in
education in the future.
