The relationship between public education expenditure, demography and economy crisis in Malaysia

• Main Author: Wong, Sing Yun
• Format: Thesis
• Language: English; English
• Published: 2019
• Subjects: HJ7461-7980 Expenditures. Government spending
• Online Access: https://eprints.ums.edu.my/id/eprint/38517/1/24%20PAGES.pdf; https://eprints.ums.edu.my/id/eprint/38517/2/FULLTEXT.pdf; https://eprints.ums.edu.my/id/eprint/38517/

The main aim of this thesis was to examine the determinants of the public education expenditure in Malaysia for the period of 47 years from 1971 to 2017. This study intended to address the existing research gaps within Malaysia context which had failed to receive much attention in the past. The determinants of education expenditure were modeled using time series data within the autoregressive distributed lag (ARDL) Bound Testing approach. The empirical findings from this study advocated that the real gross domestic product, real GDP per capita, inflation rate, tax revenue, total population and working age population served as the long run determinants of public education expenditure. Findings from the ARDL Bound Testing result further provided robust support to the Wagner's law in the long run. This implied that the government would adjust its expenditure to respond to the demand of the society in the long run. Meanwhile, the Error Correction Model illustrated that the public education expenditure was sensitive to the influences of real gross domestic product, real GDP per capita, unemployment rate, inflation rate, tax revenue, public debt, total population, children population of age less than 15, and elderly population of age above 64 in the short run. This study suggests that policy makers should play significant role in responding to the economic situations and emerging needs of the society in its future decision-making process on the education spending allocation.