Investigating the Convergence of Higher Education expenditure in Iranian Provinces: A Panel Data Approach

Higher education is considered as the engine of development and growth because of its benefits for increasing research, knowledge and technological innovation in the country. Also, the cost of education is a representative of human capital and among the determining factors of regional inequalities. Improving the dynamics of growth in future and considering the role of education in this field, the issue of appropriate financing levels is more important than in the past. Convergence analysis is interpreted to mean that there is a tendency to reduce the inequality of spending per student over time across the country. Therefore, using panel data approach, this article examines the trend of expenses of each student in higher education institutions (public and private) in the provinces of Iran during the period of 2006-2018. The results showed that there is absolute beta convergence in the per capita education costs of Iran's provinces. The speed of convergence in public expenditures of higher education is higher than private expenditures, but in both cases the speed of convergence is very low. This means that the state of inconsistency between the provinces of Iran in terms of private and public spending on higher education, in a certain time and period, will decrease over time and all sample provinces will converge to a stable state, but the speed of reaching the poor to wealthy areas, the cost of education is very low. Also, the examination of the per capita educational costs of each province indicates the existence of sigma convergence in the government expenditures of education in the provinces of Iran, and this has been effective in the overall convergence of the per capita educational costs of each province. In the sense that the inequality in the public costs of higher education in the provinces of Iran is decreasing rapidly, but this inequality in the private costs of higher education is decreasing and improving very slowly.