Impact of public education spending on economic growth in Sri Lanka

Abstract

Introduction:

Education is considered a major source of per capita output and economic development of a country. Usually, the development of education provides a strong impetus for economic growth through human capital formation and improving productive capacity of the labor force of a country. The Sri Lankan Government’s commitment to spending on education since introduction of free education in 1945 has played a tremendous role in achieving national development of the country. But, the importance of education spending in Sri Lanka seems to be given low priority after liberalization of economy in 1977. The positive effect of education on economic performance and the functional relationship between education and economic growth experienced in many cases have been identified (Maritra and Mukhopadhyay, 2012; and Schultz, 1988). However, the contribution of education spending on economic growth in Sri Lanka is still a controversial issue due to the lack of literature in this area of study.