The impact of higher and secondary education on economic growth in Azerbaijan

This article examines the impact of education on GDP growth (non-oil sector), a key indicator of Azerbaijan's economic development. The study used non-oil GDP per capita as a dependent variable, capital stock, total government expenditure, oil fund revenues, number of graduates of specialized secondary educational institutions, number of graduates of higher educational institutions, and human development index as independent variables. Quarterly data covering 2003-2019 were used to construct the model. 9 models were built using Vector Error Correction Models. According to the models' results, education has significant positive effects on economic growth in models 1, 4, 7 in the short term, significant adverse impact in models 6 and 9 in the long run. The best result among these models was obtained in model 1 (independent variables are capital stock, oil fund revenues, and the number of graduates of specialized secondary educational institutions). Because almost all indicators in the first model for both short-term and long-term are significant.