| Summary: | 碩士 === 逢甲大學 === 財稅所 === 98 === Taiwan, a small country with insufficient nature resources, had rapid economic growth because of the high quality and educated labor force. The improvement of level of education helps Taiwan to change from a labor intensive economy to a capital and technology intensive one. And, the development of knowledge economy indicates that high-skilled labors are required to sustain global economic development and reveals the importance of education.
This research focuses on the relationship between educational expenditure size and economic growth. Our research hypothesizes that educational expenditure size and economic growth has nonlinear relationship. Ram’s (1986) two-sector model is adopted into a threshold autoregression model. And Hansen (1999) TAR model is used to investigate the correlation between these two elements. The threshold variable is classified into two dimensions, the proportion of educational expenditure with private sectors to GDP and the proportion of educational expenditure without private sectors to GDP. The empirical result indicates that both dimensions have threshold effects. Educational expenditure size has significantly positive relationship with economic growth when it is smaller than threshold value. However, as the educational expenditure size is larger than threshold value, the effect from expanding educational expenditure size is getting smaller. However, the effect of economic growth is presented the negative effect when the educational expenditure size is larger than threshold value. Although the result doesn’t match our expectation of this research, but we can realize that the oversize educational expenditure size makes the economic growth gradually decline. In this paper, we can proof that the relation between the educational expenditure size research and economic growth research has the significant threshold effects in the nonlinear research.
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