The effect of education on economic growth in Iran: Using a Bayesian quantile method

Abstract

This study generalizes Mankiw-Romer-Weil's (1992) growth model by dividing physical capital into private and public sectors. Then, the effects of three types of capital, including private and public physical capital and human capital, are evaluated on Iranian economic growth. We use time-series data from 1959 to 2019 and apply the Bayesian quantile method to estimate the model. The results show that private physical capital and educational capital positively affect the lower quantiles of economic growth. However, public capital is strongly associated with all segments of the conditional distribution of per capita income. In addition, the effect of public physical capital on economic growth is more significant than both private physical capital and human capital.

Keywords

• human capital
• private and public sectors
• capital formation
• economic growth
• bayesian quantile method