THE ROLE OF HIGHER EDUCATION TOWARDS EFFICIENT GROWTH STRATEGY: AN ARDL BOUNDS TESTING APPROACH
In this study the ARDL bound testing approach is used in order to investigate the impact of higher education on the working efficiency of Pakistan’s economy. The study has used time series data analysis from 1990 to 2019 to estimate the model. The dependent variable of the study was the efficiency score which is calculated on the basis of the production function. Capital stock, labor force participation and energy consumption was used as inputs while GDP used as output. The key independent variable is the higher education index constructed by incorporating the variables of enrolments in the undergrad and graduate programmes. On the other hand, capital formation, unemployment, urbanization, public health expenditures and inflation rate are the important determinants of the model. On the basis of analysis, the study suggests that the higher education has positive and significant relationship with the working efficiency of the economy. Moreover, there is the existence of long run relationship and dampening movements will adjust the model in the long run. The study directed the need for policy makers to encourage the infrastructure development for the higher education in order to increase more graduates and provide more skilled personnel to the society.