Abstract
This paper aims to investigate the short and long-term dynamic relationship between public educational expenditure and economic growth in Bangladesh using annual time series data from 1991 to 2021. Time series analysis has been performed with a quantitative methodology using the Ordinary Least Square (OLS) model, and Auto Regressive Distributive Lag (ARDL) cointegration model. The study specified a multiple regression model where per capita GDP (as a proxy of economic growth) is used as a dependent variable, and public educational expenditure (share of GDP) and public educational expenditure (share of total government expenditure) are used as independent variables. The estimated results indicate that public educational expenditure (share of GDP) has a positive significant impact on per capita GDP. In contrast, public educational spending (Share of total government expenditure) negatively affects per capita GDP in Bangladesh. Econometric Software EViews Student Version 12 has been used to estimate the empirical analysis. The Error Correction Model (ECM) has been used to capture the short-run adjustment. The Granger causality test shows that there is a unidirectional relationship exists between per capita GDP and public educational expenditure (Share of total government expenditure). The study suggests some policy recommendations to increase public educational expenditure and concludes that more education funding from the government can improve the education system, teacher quality, and accessibility for all which can help create a more skilled workforce, and economic growth in Bangladesh.