A Study the Role of Education in Economic Growth of Iran

In many developed countries the investment on education is the key factor of economic growth, and also in many developing countries the investment on education makes the economic growth. In many countries such as Japan and South Korea the initial consideration was on the educational investment and this fact prospered the economic growth. In some other countries like Venezuela first the economic growth and then the educational development is considered. Based on the theory of Human capital dealing with the economic growth and educational effect, it is believed that the improvement of general sanitation, people skills and motivation can promote the workers' outcome and eventually the skilled people can play the key role in the economic growth. The present study aims to investigate the causal relationship between the economic growth and the expense of people training by causality Granger Test to find out the types and directions of the cited relationship in Iran's economy between 1979 till 2001. This study, however, benefits from some qualitative and quantitative educational factors as main productive institution. The results of the present study taken in Iran stand for the meaningful effects of the current expense of education on GNP. In other words, in Iran there is a monolateral relationship between the economic growth and the current expense of education. Considering the results, if the educational expense is increasing and appropriately manipulated, it will both prosper the GNP and then lead to the economic growth. It is consequently concluded that the qualitative and quantitative educational factors are effective in persons' productive growth.

Key words: Causality Granger Test, Economic Growth, Educational Economics, Human Capita