The Relationship Between Education Outputs, Education Expenditure, and Economic Growth in Saudi Arabia

The present study investigated the relationship between education outputs, Education expenditure, and economic
growth in Saudi Arabia for the time period of 1986–2016. The results obtained after employing the Autoregressive
Distributed Lag (ARDL) model revealed a long-term relationship between the studied variables, an inverse
relationship between the number of graduates and growth in the long term, whereas a non-significant positive
relationship appeared in the short -term. Findings indicate also that public spending in education has a positive and
significant impact on economic growth in the long run. Furthermore, he observed that a 1% increase in public
expenditure in education contributes 18% increase in GDP per capita in the long run. This is in line with economic
theory and previous research showing that expenditure on education leads to a rise in GDP per capita and economic
growth rates. The recommendations of this study are fundamental to the Kingdom of Saudi Arabia.