How Education Does at All Levels Influence Total Factors Productivity Growth?

The issue of improving productivity growth is well stressed in developing and less developing countries that confront a severe economic and social deterioration owing to the misuse of the available human and physical resources. Education, as a main component of human capital, plays a leading role beyond that of physical capital in prompting Total Factor Productivity growth through its potential spillover effects on the technical change and efficiency improvement. Hence, considering education quality embedded in human capital attributable to the rising educational attainment of the labor force is a priority. On this ground, the aim of the paper is to examine the long run impact of education quality on TFP growth in Egypt during the period (1980-2014). In a two-step approach, the Gauss Newton algorithm method is used in estimating the nonlinear Cobb-Douglas production function to calculate TFP series. In the second step, the TFP determinants have been estimated by paying special attention to education indicators besides other control variables through applying the Auto regressive Distributed Lag Bounds test approach of cointegration. Results revealed that TFP growth appears to be significantly slightly enhanced by quality improvements in higher education only. Some reforms must be done on the basis of analysis and research