FINANCIAL PROVISION OF QUALITY EDUCATION AND ECONOMIC GROWTH AS THE BASIS OF SUSTAINABLE DEVELOPMENT IN EU COUNTRIES
Abstract
The article examines the role of funding for quality education as a key driver of economic growth and sustainable development in the European Union. The study focuses on identifying the structural relationships between public spending on education, human capital development, and macroeconomic performance indicators. Particular attention is paid to the institutional dimension, which significantly influences the effectiveness of translating financial resources into concrete economic outcomes. The empirical analysis is based on panel data covering EU countries for the period 2004-2025, drawn from Eurostat and the International Monetary Fund. The study employs econometric modeling with fixed effects, interaction terms, and dynamic specification to account for lagged effects and structural heterogeneity. The results confirm that funding for education has both direct and indirect effects on economic growth, primarily through human capital accumulation and improved labor market performance. At the same time, the study shows that the amount of funding alone does not guarantee positive economic outcomes. The effectiveness of investments in education depends crucially on the quality of institutions and the rational allocation of resources across different levels of education. A significant interaction between education spending and institutional efficiency was highlighted, indicating that countries with more robust institutional frameworks achieve better returns for similar levels of investment. This paper proposes an integrated approach to measuring sustainable development, combining social, economic, and innovation indicators. It argues that education should be considered not only as a social expenditure but also as a strategic investment for long-term economic sustainability and competitiveness. The findings of this scientific study provide a basis for improving public funding policies in the education sector and underscore the importance of aligning funding mechanisms with institutional reforms and labor market needs. Financial support for education should not be seen solely as a social expenditure, but rather as a strategic investment in the future competitiveness of the economy and the overall sustainability of society. Sufficient funding, effective management and a strong focus on learning outcomes are prerequisites for achieving truly sustainable development in the European Union countries.
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