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Book of Abstract • ISSN: 3028-1636 (print) • 3028-2004 (online)

Analysis of Philippine Government Expenditure on Education and GDP Growth

Jennifer T. Pelegrino
Volume 4 Issue 1, July 2023

The paper investigates the relationship between government expenditure on education (GEE) and the gross domestic product (GDP) in the Philippines using time series data from 2000 to 2021. The study seeks to examine the nature and direction of cointegration between government expenditure on education and economic growth to substantiate the theory of Keynesian’s hypothesis, and Wagner’s law that public spending generates national income and national income drives government expenditures, respectively. The econometric method employed was the cointegration using Engle-Granger and Phillips-Ouliaris tests and error correction technique. Based on the Engle-Granger and Phillips-Ouliaris tests, results revealed that gross domestic product and government expenditure on education are cointegrated. In estimating the long-run and short-run models, both the long-run and short-run models are appropriate for GDP and GEE. However, the study has limitations in terms of its sample frame because it only contains the time series data from 2000–2021 because those are the only statistics for Government Expenditure on Education that are currently accessible. Meanwhile, the research gap to be filled in some of the literature is the failure to estimate and provide the long-run and short-run models in cointegration analysis which will be shown in this paper. On the other hand, this study is anchored on Sustainable Development Goal No. 4, Quality Education and No. 8, Decent Work and Economic Growth.

Cointegration, Education, Government Expenditure, GDP, Relationship

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