Higher Education Expenditure and Economic Growth in Kenya
Loading...
Date
2019-07-09
Authors
Wambua, L. N
Mugendi, C.
Journal Title
Journal ISSN
Volume Title
Publisher
Strategic Journals
Abstract
Higher education investment has been at the centre of government policy since independence with a
commitment to fight ignorance. This study aimed at analyzing the relationship between higher education
expenditure and economic growth in Kenya. The study was guided by the following specific objectives; to
assess the impact of government expenditure in higher education on economic growth in Kenya and to
establish the causality and direction between government expenditure on higher education and economic
growth in Kenya. Econometric analysis was done using Vector Error Correction Model. The data was collected
from secondary sources such as World Bank, ILO and economic surveys and statistical abstracts of Kenya
National Bureau of Statistics. To correctly fit the model, higher education expenditure was modeled together
with labor force participation, fixed capital formation and inflation towards GDP. The results revealed that
Higher education expenditure, Labor force Participation Rate and Fixed Capital Formation had long-run
adjustment towards equilibrium. The short run equations showed that none of the variables caused RGDP at
the lag level but jointly had significant causality towards RGDP. The results from test for joint causality
indicated that although higher education expenditure had no significant individual short run effect of RGDP,
its absence in the model fades the short-run joint causality of the other variables on RGDP. The long-run
dynamics revealed that higher education expenditure and labor force participation rate have positive and
significant long-run impact on RGDP while fixed capital formation and Inflation had a negatively significant
long-run impact on RGDP. From the findings, the study recommended that the government should increase
the proportion of spending on higher education to promote high quality training, research and infrastructure
in order to increase its impact in the short-run and long-run.
Description
A Research Article in The Strategic Journal of Business & Change Management
Keywords
Government Expenditure, Higher Education, Economic Growth
Citation
Wambua, L. N., & Mugendi, C. (2019). Higher education expenditure and economic growth in Kenya. The Strategic Journal of Business & Change Management, 6 (3), 112 – 131.