EXPLORING THE RELATIONSHIP BETWEEN HIGHER EDUCATION AND ECONOMIC GROWTH IN PAKISTAN: A TIME SERIES ANALYSIS

Abstract

This paper has evaluated the interrelationship between economic growth and development of higher education in Pakistan using a time series analysis over the period of 20 years which was thorough. The study explored the impacts of an increase in enrolment in tertiary education, government spending in higher education, and the growth of institutions on some important economic indicators, which are growth of GDP, per capita income and level of productivity. The analysis used quantitative techniques of correlation analysis, regression modeling, and Granger casuality observations in the analysis of data between 2000-2020 data involving the university enrollment trends, the rate of graduation, and budget allocation to education as well as the macroeconomic variables. Those results indicated that there existed complicated mutual influences between investments in the higher education and the performance of the economy, with the occasional differences in the temporal pattern variations at various periods. Though there has been an upsurge in infrastructure generation and enrolment in higher education, the conversion into incessant economic growth was fraught with some drawbacks, which encompassed brain drain, internal structural economic constraints and skill-job mismatches. The research conducted showed that there were considerably positive correlations between increased spending in education and growth in GDP in a given time and here especially in 2005- 2010, but it decreased over the next years. The findings showed that the policies of the government of funding the research, university-industry collaborations, and graduate retention mechanisms were vital in the optimization of the economic implications of their higher education investments. The study also identified useful information on the part of policymakers in determining the best education techniques to initiate sustainable economic growth in the developing economies.