Impact of public education spending on GDP in Gulf countries: A machine learning analysis

This study explores the dynamic relationship between public education expenditure and GDP in Gulf countries from 1980 to 2022. Using a fixed-effects panel regression model, we analyze how education spending, along with other macroeconomic factors (inflation, unemployment, trade openness), affects economic performance. Our findings indicate a statistically significant positive relationship between education expenditure and GDP, which supports human capital theory and highlights the essential role of education in achieving long-term economic prosperity. In addition to education, we find that oil prices and final consumption expenditure also positively influence GDP. However, the impact of gross capital formation is not statistically significant. The model accounts for a substantial portion of the variation in GDP (R-squared = 0.99), although some unexplained variance suggests the presence of other influencing factors. These results emphasize the importance of continued investment in education, along with policies aimed at enhancing educational quality and promoting economic diversification, for sustainable development in the Gulf region.