Education, Employment and Economic Growth Nexus: A case study of Pakistan

Economic growth is a fundamental requirement for the development of a country. Therefore, the questions concerning the factors that can enhance the economic growth of a country are of immense importance especially for developing countries such as Pakistan. The present study provides evidence that promoting education and providing increased employment opportunities can produce positive return in the form of higher economic growth. It highlights the role that employment level and education can play in helping the economy to achieve rapid growth. To analyze the long-run and the short-run relationship among the key variables of interest, Johansen Co-integration test and Vector Error Correction Model (VECM) has been applied to annual time series data from 1980 to 2013. The empirical results confirm a positive long-run relationship between both employment and economic growth and education and economic growth.