The Impact of Years of Schooling and Quality of Education on Economic Development: A Comparative Study Using Panel Data and the Generalized Method of Moments (GMM) Approach
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Abstract
This study aims to examine the impact of both the number of years of schooling and the quality of education on economic development, focusing on the trade-off between these two factors in terms of importance and impact. Panel data covering a group of countries for the period 2007–2017 were used, and the generalized mean of moments (GMM) methodology was employed to address issues of endogeneity and heteroskedasticity in the model, ensuring accurate and unbiased estimates.
The empirical results indicate that both the average number of years of schooling and the quality of education have positive and statistically significant effects on economic development, reflecting the importance of education as a lever for development. However, the paradox lies in the fact that the effect of the average number of years of schooling was stronger than the effect of the quality of education, which contradicts some literature that prioritizes the quality of education. This potential discrepancy may be explained by the nature of the sample used or by the levels of quality and education in the countries under study, as the number of years of schooling remains a major obstacle to development in some countries, compared to the level of educational quality.
The study emphasizes the need to adopt dual policies aimed at both expanding schooling opportunities and improving the quality of education, taking into account the specificities of each country and its development stage. It also recommends further studies that consider the interactions between quantity and quality in education and their combined impact on economic development.
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