This paper aims to examine the relationship between education levels and economic growth in Malaysia by using data from 1982 to 2011. Johansen co-integration is employed to analyze the data. Findings show that all education levels are related to economic growth. The Granger causality model is used to measure the causal effect of educational levels and economic growth. The results indicate that primary and tertiary does not Granger cause economic growth and vice versa. Causality runs from no formal and secondary education to economic growth. Therefore, the government should increase investment on education to increase the economic growth.
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Mohd Shahidan Shaari (2014) studied this question.
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