Formation of highly intelligent capital at the expense of government spending: Economic effect for Kazakhstan

Type of the article: Research ArticleSupport for the education system is a strategic measure that ensures the long-term development and growth of a country’s economy. Increased funding in this area enables the training of qualified specialists who can adapt to the challenges of the modern economy. In this regard, the purpose of this study is to assess the impact of government spending on education to generate highly intelligent human capital on economic growth in Kazakhstan from 2009 to 2023 using the least squares method, which includes components of government spending on education, as well as the GLS random effects model, which is used to determine the reliability of results. The results show a strong relationship between economic growth and government spending on secondary technical education (0.2393), a moderate relationship between higher education spending (0.0423) and economic development, and a weak relationship between primary education (–0.0050) and economic growth. Thus, a 1-point increase in expenditures for secondary technical education may lead to a 0.2393% increase in GRP, and a 1-point increase in government spending on higher education will lead to a 0.0423% increase in GRP. However, a significant share of government spending is on basic primary education (58%). Based on this, the financing of the education system requires a shift in the financing vector, with a greater focus on higher and secondary technical education, to achieve a more significant impact on economic development.Acknowledgments This research is supported by the Science Committee of the Ministry of Science and Higher Education of the Republic of Kazakhstan (AP19680246 “Building up highly intelligent human resources in the conditions of digitalization of the economy of Kazakhstan: problems and prospects”, 2023–2025).