Investigating the link between government expenditure on education and education attainment

Abstract

This study evaluated the effect of government expenditure on education attainment in South Africa by assessing the effect of the amount spent by government on education from 1980 to 2014 on human capital development. The study is centred around two objectives: (1) to analyse the effect of government expenditure on education attainment; and (2) to investigate the effect of education attainment on human development. Human capital development was measured using Gross Enrolment Ratio for secondary school, supplied by the South African Reserve Bank. Data on government expenditure on human capital was acquired from the Treasury database. The study draws from the human capital theoretical framework in explaining the effect of education expenditure on human capital development.

The findings of the study showed that there is a positive relationship between human capital development and government expenditure. These findings showed a strong relationship between government expenditure and gross enrolment ratio at 99 % confidence interval (p< 0,0001). The theory of human capital is thus confirmed with these findings.