Analysing the relationship between education and economic growth in Uzbekistan: a VAR model approach

Kasimov, Otabek (2025) Analysing the relationship between education and economic growth in Uzbekistan: a VAR model approach. HUNGARIAN STATISTICAL REVIEW, 8 (1). pp. 31-47. ISSN 2630-9130

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Abstract

This paper explores the relationship between education and economic growth in Uzbekistan usingthe Vector Autoregressive (VAR) model. Employing time-series data from 1991 to 2023, the studyexamines how government expenditure on education, industry value-added, and GDP per capitainteract dynamically. The results reveal that government expenditure on education significantlyinfluences economic growth, with impulse response analysis showing persistent and substantialimpacts. However, the contributions of industry value-added and GDP per capita appear more limitedand transient. Variance decomposition confirms the dominant role of education expenditure,explaining the largest share of forecast error variance over time. The findings underscore the criticalrole of educational investment in fostering long-term economic development, particularly intransitioning economies like Uzbekistan. This study contributes to the literature by providingempirical evidence specific to Uzbekistan, addressing gaps in previous qualitative research, andoffering actionable insights for policymakers. The findings align with human capital theory andsuggest that enhancing educational infrastructure and quality is essential for sustainable economicgrowth.

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