Environment, education, and economy nexus: evidence from selected EU countries

Abstract

Among the most fundamental problems today are environmental problems. As people earn higher incomes as a result of getting a good education, their sensitivity to environmental problems increases. As the income level of both the consumers who have received quality education and the producers who make conscious production increases, their demand for environmental quality and their sensitivity to environmental problems will also increase so it is thought that educational expenditures and policies can affect the number and cost of environmental problems. On the other hand, economic activities comprehensively consume natural resources and impact the ecological quality adversely. Therefore, GDP and the educational expenditures variables are used in the model. The aim of this study is to analyze the relationship between environment, education, and economy during the period of 1998-2017 from selected EU countries (Austria, Italy, the Netherlands, Norway, Poland, Portugal, Romania, and Slovakia). As a result of the panel data analysis, according to the Durbin-Hausman cointegration test result, a long-run relationship between the variables was determined at the level of 1%. According to the results of the Dumitrescu-Hurlin causality test, a unidirectional causality relationship from educational expenditures to ecological footprint at the level of 5%, a unidirectional causality relationship from ecological footprint to renewable energy at the level of 1%, and a bidirectional causality relationship at the level of 1% between ecological footprint and GDP were determined. According to the results of Granger causality test based on the VEC model, a unidirectional causality relationship from ecological footprint to educational expenditures at the level of 5%, and bidirectional causality relationship between ecological footprint and renewable energy (from ecological footprint to renewable energy at the level of 10%; from renewable energy to ecological footprint at the level of 1%) were determined. Based on the findings, it can be concluded that economic and educational policy makers should be aware that they have important consequences on environment.