Abstract:

The relationships between human development index and higher education, as well as gross domestic product and higher education are tested for Portugal between 1991-2018. Using the Autoregressive Distributed Lag Model methodology, cointegration and both short- and long-run relationships are analysed through four models. All four models were corrected from outliers and structural breaks and revealed the presence of cointegration. Higher education has proven to positively impact on human development index, on the long-run. Meanwhile, there are evidences of positive impacts of higher education in gross domestic product in only one of the two estimated growth models. Additionally, the growth of gross domestic product is a long-run driver of human development index. Accordingly, policies focused on promoting higher education are recommended due to their long-run impacts. Even if there is no direct relationship with gross domestic product, the development of higher education will promote an overall improvement on human development index of the country.

Keywords:

ARDL, Higher Education, Human Development Index.