Investigating the Impact of Education Expenditure on Labor Force Participation in Turkiye
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https://doi.org/10.5281/zenodo.14579917Keywords:
Labor Force, Education, TurkiyeAbstract
Grounded on key economic theories such as Human Capital Theory and Endogenous Growth Theory, this study investigates the long-term nexus between labor force participation and education expenditure in Turkiye during the period spanning from 1991 to 2021, utilizing advanced econometric methods, including Ng & Perron and Elliott, Rothenberg & Stock unit root tests, and Fourier Shin and Shin cointegration tests, to analyze the dynamics between these variables. The results confirm that both education expenditure and labor participation are non-stationary. Moreover, there is a piece of evidence exhibiting long-term cointegration between the employed variables, particularly under the OLS method. Furthermore, the reveals indicate a significant positive nexus between education expenditure and labor force participation, with a stronger effect identified through Dynamic Least Squares (DOLS) estimation compared to Fully Modified Least Squares (FMOLS), suggesting that increased investment in education can enhance labor market outcomes by improving workforce skills and employability. Policymakers should address employment challenges and consider prioritizing educational investment as a strategy to boost labor force participation. Moreover, investments in education can have a substantial and positive impact on labor force participation by improving the employability and skills of the workforce. Future research is required to provide deep investigation regarding the relationship between labor force and education.
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