Government Expenditure, Education, and Productivity in the European Union: Effects on Economic Growth

Abstract

Abstract In this article, we will analyse the effects of public spending on education on productivity, wages, and growth at European Union level. We are trying to find out to what extent education expenditures and human capital contribute to improving productivity, achieving higher wages, and enhancing the standard of living of the population, as measured by per capita growth. Our results do not show a clear and direct relationship between public expenditure on education and productivity, but an indirect relationship through the acquisition of a higher level of human capital and technological skills, which leads to output increases.