On educational investment and economic growth: An empirical study in Australia

Australia is known for its high quality education, how effective of Australian educational investment is a question worth discussing. On collecting 1980 to 2008 Australia´s date on educational investment and economic growth, this article use Feder-model to analyze educational investment´s total contribution to economic growth in Australia and its spillover effects to non-education sector. The study shows that: Australian educational investment has a high overall contribution to economic growth. Investment in education increase by 1% can promote economic growth of 18.808%, which is much higher than the world average. However, educational investment in Australia has little spillover effect on non-education sector. Investment in education increase by 1% only can promote non-education sector growth 0.126%. Australia should work to strengthen the cooperation and exchanges between education sector and non-education sector and to promote the spillover effects of educational investment.