The Effect of Educational Expenditures on Added Value in Industrial Sector

The Effect of Educational Expenditures on Added Value in Industrial Sector K. Shahbaazi, Ph.D. M. Hassani, Ph.D. N. Shahbaazi Since 78% of the work force in Iranian industries consists of those holding a high school diploma or less, any investment in increasing this level of education could lead to an increase in the added value in the industrial sector. Analyses of the available annual data covering the period of 1979-2009, show that any increase in educational expenditures, both short and long term, has led to a significant increase in industrial added value. In the long run, educational expenditures have the third highest effect, following industrial investment and higher education expenditures, on added value. For every 1% increase in educational expenditure, 0.17% increase in industrial added value was observed. Key words: education, added value, industrial sector, expenditures, human capital