EDUCATION EXPENDITURES, SCHOOL ENROLLMENT - ATTAINMENT IMPACT ON ECONOMIC DEVELOPMENT: THE WESTERN BALKAN COUNTRIES

This paper comprehensively examines the intricate relationship between education expenditures, school enrollment rates, and educational attainment levels on the economic development of Western Balkan countries from 2010 to 2022. By employing a quantitative methodology that encompasses Ordinary Least Squares (OLS), Fixed Effects (FE), Random Effects (RE), and the Hausman and Taylor instrumental variable approach, the study aims to uncover the dynamics that influence economic growth in this region. The findings indicate that general government education expenditures do not statistically affect GDP per capita, suggesting that merely increasing funding for education may not directly translate into economic benefits. In contrast, the analysis highlights a concerning trend where high unemployment rates among individuals holding advanced degrees, such as PhDs and master's degrees, negatively impact GDP per capita. This underscores the importance of aligning educational outcomes with labor market needs. Additionally, the study reveals a positive correlation between per capita GDP and both school enrollment figures and overall academic achievement within the region. These insights contribute to a deeper understanding of the complex interplay between education and economic development, emphasizing the need for targeted policies that enhance educational quality and relevance to foster sustainable economic growth in the Western Balkans.