The impact of education expenditures on economic growth: empirical estimation

The article analyzes and evaluates the dependence of population qualifications upgrading on the amount of higher education expenditure in Ukraine and certain foreign countries, and the impact of higher education on the economic growth is also grounded.It is determined that the share of the population with higher education in Ukraine which is reflected in official statistics is growing every year. At the same time, over the past 5 years (2015- 2019) the total cost on higher education in real terms were decreased by almost 50%, and to a greater extent it was made by the state, resulting in a reduction in the number of institutions and teachers of higher education. Against this background, a certain inertial increase in the share of highly qualified staff is still observed. This situation clearly contradicts the economic theory and practice of many European countries, where in connection with the Fourth Industrial Revolution the increase in financing of higher education in order to solve the problem of the shortage of STEM- specialists is recognized as highly relevant.The analysis results of the impact of higher education financing on GDP growth in a number of foreign countries showed that there is a general trend with the higher expenditure on education corresponds to higher population qualification and larger size of GDP. However, no strong dependence of the populations' skills upgrading on education expenditure and no strongdependence of GDP growth on the population qualification upgrading in interstate comparisons has been established which is explained by the historical features of the development of individual economies, the specifics of national labour markets, etc. This conclusion is also confirmed by statistical analysis of individual EU member states, including those that had a planned economy in the past (Poland, Estonia, Czech Republic, Slovakia, Latvia, Lithuania, Slovenia). In many of them strong linear relationships were found between the population qualification level and higher education expenditures, and between GDP growth and the population qualification level.On the basis of the analysis, taking into account the need for the accelerated development of national industry on an innovative basis, it is proposed to reconsider approaches to public financing of higher education in Ukraine and to stimulating the development of private financing in order to avoid irreversible deterioration in the quality of human capital.