The Structure of Public Education Expenditure and Economic Development: A Granger Causality Analysis

Abstract Clarifying the Granger causal relationship between the structure of public education expenditure and economic development is an essential prerequisite for optimizing the structure of public education expenditure. Based on the time series data released by the World Bank, this article takes the structure of public education expenditure in Sweden, Denmark and France as the primary objects. With the help of the Granger causality test and the Pearson correlation coefficient, the Granger causal relationship between primary education expenditure, secondary education expenditure, tertiary education expenditure and economic development rate (annually) have been analyzed in detail. The correlation between various levels of public education expenditure is analyzed. Finally, particular policy suggestions were put forward to optimize the hierarchical structure of public education expenditure and perfect the national economic development.