Assessing the Nexus Between Education, Economic Growth, and Innovation: An Empirical Analysis

Abstract

Abstract Countries with a higher proportion of tertiary education graduates are wealthier and offer more diverse and motivating career opportunities to individuals, including students. In recent years, an increasing number of studies have examined the impact of education on wages and economic development and the impact of R&D and innovation on economic and social progress. However, research has focused less on the specific impact of education components (competencies, learning methods, information and communications, technology, and infrastructure) on economic development and innovation. The paper uses quantitative research methodology and dynamic panel models explore the impact of education on economic development, wages, and innovation in the European Union countries and countries that participate in PISA testing, over the period 2012-2019. The data was gathered from Eurostat, and the time period studied ranged from 2012 to 2019. We found evidence that the substantial funding of R&D and education, which promote innovation, supports a country’s need to develop and distinguish itself from others that underfund the most critical areas of economic development. The implications of this study are significant for Romania’s academic and political environments, as it encourages changes in educational policies that will consider the multifaceted impact of educational components on development through innovation.