Impact of public expenditure on education on economic growth in the southern macro region of Peru, during the period 2003-2021

Abstract

The present research work aims to determine the impact of public spending on education on economic growth in the southern macro region of Peru during the period 2003 to 2021, covering the regions of Puno, Tacna, Arequipa, Moquegua, Apurímac, Cusco and Madre de Dios. The data used come from the statistical area of ​​the Ministry of Economy and Finance, the National Institute of Statistics and Informatics and the Educational Quality Statistics of the Ministry of Education. The methodological approach adopted is hypothetical-deductive, non-experimental with a panel-type design; the estimation of the model was carried out using the Generalized Least Squares Feasible panel data technique which reveals significant quantitative relationships between the analysis variables. In general terms, the main findings indicate that a 1 % increase in public educational spending correlates with a 0.12 % increase in economic growth. Furthermore, when breaking down the impact of public spending by different levels of initial education - primary, secondary and higher - a 1 % increase generates an increase of 0.13 %, 0.14 % and 0.069 % respectively on economic growth. Furthermore, it is highlighted that investment in physical capital has a positive effect on economic growth. In conclusion, total public spending on education and spending by educational levels exhibit a positive and significant impact on economic growth, highlighting the strategic importance of government investment in education as a fundamental catalyst for economic growth