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E3 Journal of Business Management and Economics

E3 Journal of Business Management and Economics Vol. 8 (1) pp. 018-025, April 2017; © E3 Journals; ISSN 2141-7482
DOI: http://dx.doi.org/10.18685/EJBME(8)1_EJBME-17-012

The role of education inequality in the growth-volatility relationship in MENA region

Amira Emara1 * , Engy Raouf1
1 Department of Economics and Foreign Trade Faculty of Commerce and Business Administration Helwan University
*Corresponding Author E-mail: amiraemara2000@yahoo.com
Accepted 29 March 2017

Abstract

The main objective of this paper is to investigate the impact of education inequality on the growth-volatility relationship for 12 MENA countries over the period 1970-2010. The study measured inequality of education by calculating an Education Gini Index, then estimate volatility using GARCH model. In order to achieve the main objective of this study, two different econometric techniques have been used- Generalized Method of Moments and the Pooled Mean Group- ARDL estimator. Then we compared the results of the two techniques. The empirical analysis shows that education inequality affects growth negatively. While the volatility has a positive impact on growth, its interaction with education inequality has a negative impact. These results suggest that when policymakers decide to increase investment in education, even during economic downturns, they should take into account the equal distribution of educational services.

Keywords: Educational inequality, Volatility, Economic growth, Education Gini index, MENA, GMM, GARCH, Pooled Mean Group- ARDL

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