Government expenditure on education in the light of the paradigm of sustainable development: Econometric spatial models and models of dynamics

Abstract

The knowledge economy is a paradigm of the post-industrial stage of the development of society, therefore research on the relationship between the level of the main economic indicators and state spending on education is relevant. The purpose of this article was to assess the impact of the main economic indicators on the state spending on education both in total and per capita. Econometric models based on spatial data as well as dynamics models were constructed, and the Goldfeld-Quandt test was performed. The study was conducted on the example of the most influential countries of the world and the member states of the European Union. It is shown that the growth of the total volume of gross domestic product and purchasing power parity is accompanied by the growth of the total volume of state education deductions and education deductions per capita. For countries with relatively low purchasing power parity, the correlation between these indicators is tight, and the dispersion of empirical data relative to theoretical data derived from the econometric model is not statistically significant. On the contrary, for countries with high purchasing power parity, the dependence between these indicators does exist, but there is a significant dispersion of empirical data relative to theoretical data. The GoldfeldQuandt test showed that the countries that were selected for the study should be classified according to this feature to different sample populations. It was found that the volume of deductions for education per capita has little effect on the effectiveness of the educational process. Studies of the dynamics of education expenditures have shown that although Ukraine belongs to countries with a relatively low purchasing power parity and during 2015-2022 the growth rate of education expenditures significantly lagged behind the growth rate of economic indicators, the effectiveness of education remains relatively high. The obtained research results should be taken into account in practice in order to optimize the costs of financing the educational sector.