The Impact of Government Education Expenditures on Economic Growth in China——The Analysis based on the Data from 1980 to 2011

Does education promote economic growth? Empirical evidence is not conclusive on this question. This paper uses time-series technique to investigate the relationship between government education expenditure per worker and economic growth in China during the period 1980-2011. The empirical results show that education expenditure per worker has a positive and significant impact on economic growth both in the long run and short run. Government education expenditure can promote economic growth. According to the results of Granger casualty tests,we can observe bidirectional causation between government education expenditure and economic growth. The effect of long-term government education expenditure on economic growth is greater than the short-term one. This shows the effect of long-term government education expenditure on economic growth is a long-term process of accumulation,and government education expenditure should not be a short-term behavior. At present government education expenditure of China is still at a relatively low level,so it has a large promotion space,which has a great potential to promote economic growth. In order to maintain sustained economic growth,it should be a very important education policy to increase government education expenditure and optimize the allocation of educational resources in the short term and long term.