ECONOMIC FREEDOM AND EDUCATIONAL ATTAINMENT: EVIDENCE FROM NEW EU MEMBER STATES

Abstract

Educational attainment is a critical factor for individuals and societies given its positive economic implications. Therefore, determinants of educational attainment are important for design and implementation of educational policies. In the article, the causal interaction between economic freedom and educational attainment is investigated in sample of the new European Union states over the 2000-2019 term by means of causality test. The consequences of panel level causality analysis reveal a bilateral causality between economic freedom and educational attainment in the sample. In other words, on the one hand econometric freedom has a significant influence on educational attainment, on the other hand educational attainment has a significant influence on economic freedom. Furthermore, country level causality analysis uncovered a bilateral causality between economic freedom and educational attainment in Lithuania, a unidirectional causality from economic freedom to educational attainment in Latvia, a unidirectional causality from educational attainment to economic growth in Bulgaria, Czechia, Hungary, and Slovenia.