Assessing the Cointegrating Relationship of Private and Public Gross Value Added in Education and Economic Growth in the Philippines from 2000-2023

Date

5-2025

Degree

Bachelor of Science in Economics

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Deborah B. Gay

Committee Member

Luisito C. Abueg, Gideon P. Carnaje, Maria Angeles O. Catelo

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Abstract

This study examines the cointegrating relationship between gross value added (GVA) in private and public education sectors and economic growth in the Philippines over the period 2000 to 2023. As education is a key driver of human capital development, understanding how investments from both the public and private sectors influence economic output is crucial for sustainable policy formulation. While several studies have analyzed the impact of education on growth, limited attention has been given to both the private and public contributions of education and exploring their long-term relationship with gross domestic product (GDP). The main objective of this research is to determine whether a stable, long-run equilibrium relationship exists between GVA in education (private, public, and total) and GDP using the Engle-Granger test, Error Correction Mechanism (ECM) Model, and Granger Causality test on both annual and quarterly data.

The results of the study show that no cointegrating relationship exists between education GVA variables and GDP using annual data. In contrast, quarterly data reveal a cointegrating relationship between public education GVA and GDP, and total education GVA and GDP. Furthermore, both the public and overall sector show a unidirectional relationship starting from GDP to the education GVA. These findings suggest that short-run fluctuations in economic output may significantly influence public and overall education sector performance, particularly when observed at a higher data frequency. Moreover, the Granger causality results imply that economic growth acts as a leading indicator for changes in education sector value added, rather than the reverse. The findings of the study emphasize the importance of maintaining steady investment in the education sector to support long-term economic growth through adequate investment and funding that would stimulate quality education and training.

Language

English

LC Subject

Economic development—Philippines, Education—Economic aspects—Philippines

Location

UPLB College of Economics and Management (CEM)

Call Number

LG 993.5 2025 E2 D46

Notes

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Document Type

Thesis

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