Abstract: Knowledge antagonism within a globalizing economy is prompting a fresh consideration of the role of education in development and growth. The Government of Kenya spends over 30% of its budget on education to cater for free compulsory education and subsidized secondary education. It is commonly assumed that education has an important positive effect on economic growth, but as to whether education at different levels and economic growth in Kenya has a significant relationship has been a point of contention among different scholars. The paper presents an evaluation of the effect s of various levels of education on economic growth in Kenya. Explicitly, the study sought to determine the following: The effect of university enrollment on real GDP and the the effect of middle level colleges’ enrollment on real GDP. The study adopted a correlational research design in which an evaluation was made to establish the degree and direction of relationship between the dependent variable (real GDP per capita) and the independent study variables using secondary data from the Kenya National Bureau of Statistics and Ministry of Education (1972 - 2010) for all the variables. It was hypothesized that education (various levels of the education system) does not significantly affect real GDP per capita in Kenya. The study employed multivariate co-integration methodology to evaluate the relationship among the variables. The relationship revealed that output from primary education has positive but insignificant effect on real GDP per capita while output from secondary education and enrolment in middle level colleges were positively and significantly related to real GDP per capita. Enrolments in universities were found to have a negative and significant effect on real GDP per capita. Based on the objectives, study recommends that the government should increase enrollment in schools education. It also recommends an increase in budgetary allocation to education as well as a review of the school curricula especially in universities with a view of making the education system more responsive to growth in Kenya and provide for jobs to avoid the negative impacts due to joblessness.
Keywords: Higher education, economic growth, Vector Error Correction Model.
Title: The Impacts of Higher Education on Economic Growth in Kenya Cointegration Analysis
Author: MATUNDURA G ERICKSON
International Journal of Social Science and Humanities Research
ISSN 2348-3156 (Print), ISSN 2348-3164 (online)
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