The Impact Of Education On Economic Growth: The Case Of Mauritius

Abstract

This paper focuses on the impact of investment in education on economic growth in Mauritius. It is an attempt to explore the extent to which education level of the Mauritian labour force affects its economic growth that is its output level. We have used the Cobb-Douglas production function with constant returns to scale where human capital is treated as an independent factor of production in the human capital augmented growth model. We expect to contribute to the existing literature by bringing evidence from a data set for the period 1990 to 2006 obtained from the central statistical office and Bank of Mauritius reports. The results reveal that human capital plays an important role in economic growth mainly as an engine for improvement of the output level. There is compelling evidence that human capital increases productivity, suggesting that education really is productivity-enhancing rather than just a device that individuals use to signal their level of ability to the employer.