Knowledge as Currency: A Comparative Exploration of the Relationship between Education Expenditure and Gross Domestic Product in the European Union and BRICS Countries

Abstract

The purpose of this paper is to explore the relationship between the percentage of expenditure on public education of a country and the effect that each percentage mark has on the economic growth, and therefore Gross Domestic Product (GDP) of a country. The goal of this paper is to explore how investment in education impacts the economic growth of a country through the production of more skilled workers in the workforce. This paper aims to draw a comparison between the BRICS countries, and a representative number of the countries in the European Union to compare the investment, process and product delivered through these groupings. By looking at the production function from a Marxist perspective it is inevitable to notice that the error coefficient is significantly higher within the BRICS countries than in the European Union, which is reflected in the rate of economic growth. This paper would be of interest to economists, education policy makers, researchers, and scholars.

Keywords

• brics
• european union
• education
• expenditure