Dynamic interaction between higher education and economic progress: a comparative analysis of BRICS countries

Purpose: The purpose of this paper is to gain a deeper insight on how education boosts economic progress in key emerging economies. This project is aimed at exploring the interactive dynamics between the tertiary education sector and economic development in BRICS countries. The author also aims to examine how the structure of higher education contributes to economic expansion. Design/methodology/approach: The author uses the time series data of BRICS countries across approximately two decades to determine the statistical causality between the size of tertiary enrollment and economic development. The linear regression model is then used to figure out the different impact levels of academic and vocational training programs at the tertiary level to economic development. Findings: Data from all BRICS countries exhibited a unidirectional statistical causality relationship, except the Brazilian data. The national economic expansion Granger Caused increased tertiary enrollment in Russia and India, while in China and South Africa, higher education enrollment Granger Caused economic progress. The impact from tertiary academic training is found to be positive for all BRICS nations, while tertiary vocation training is shown to have impaired the Russian and South African economy. Research limitations/implications: This project is based on a rather small sample size, and the stationary feature of the time series could be different should a larger pool of data spanning a longer period of time is used. In addition, the author also neglects other control variables in the regression model. Therefore, the impact level could be distorted due to possible omitted variable bias. Practical implications: Tertiary academic study is found to have a larger impact level to all countries’ economic advancement, except for China, during the time frame studied. There is a statistical correlation between the education and economic progress. This is particularly true for BRICS countries, especially China. But the exception is Brazil. Social implications: The government should provide education up to the certain level, as there is a direct correlation to the job creation and economic progress. Furthermore, the government should also work closely with industry to ensure growth of industry and creation of new jobs. Originality/value: The comparative analysis and evaluation of the dynamic interaction of tertiary enrollment and economic output across all five BRICS nations is unique, and it deepens the understanding of the socioeconomic development in these countries from a holistic management perspective.