Review of the Relationship Between per Capita Income and Education as Effective Indicators on Sustainable Development

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1 Available Online at Book of Proceedings published by (c) International Organization for Research and Development IORD ISSN: Book of Proceedings ISBN: IRC-2015 Istanbul-Turkey. Review of the Relationship Between per Capita Income and Education as Effective Indicators on Sustainable Development Akbar Khodabakhshi Department of Economics, Bu-Ali Sina University, Hamadan, I.R. of Iran Abstract In this study, with respect to access to the data and information needed for the role to the economic aspects of per capita income on the education index in Iran we have paid to this important and its effect on the sustainable development of the economy of the Iran. The purpose is reviewing the effect of educational system on economic development process in Iran during the last thirty years. In the preparation of the data required for the hypothesis test, data is collected from Iran's statistics center. According to the past being the subject for the relationship between variables we applied of correlation analysis test, hypothesis testing, regression and linear to Simulacra. The results of statistical analysis showed that public education progress has related to gross national production and, as a result, per capita income and its effect on communication is relatively high. Keywords: Per Capita Income, Education, Development 1. Introduction The process of progress and development in Iran has a multidimensional and from several aspects is considerable. Nowadays, considering the development is main purpose of the Nations and Governments, educational system is expected to having a significant effect in this field. It seems that the public education and higher education through creating the individual behavior and attitudes in social development will be effective on economic growth and political dynamics in the society. Education and higher education as well as to transfer of knowledge and science create values such as discipline and obedience and feel the responsibility in people and society. In addition it causes social harm reduction and increase the power superior of the people and their participation in the social economic activities. In other side, with creating the changes in individual attitudes the parents would rather quality to quantity of the children which experienced over time and they would have fewer children. In most countries and also in our country, the formal education in comparison of the other living cost has more portions of total costs and the highest share of general expenses to be accounted for the education. The rate of increase in the cost of public education that will be spent on schools and education sometime has been more than doubled of the gross national production. Does it spend as a social economic efficiency? Intellectual and material investment is spent on the country's schools has a positive effect on the socio-economic development indicators? 2. Literature Review There is much researches that shows the remarkable effect of the education on economic and social development. In most developing countries the demand for higher education has been increasing, which the main reason for this increase is achieving the high social position. However, when the educational system and Organization extend their programs, while that decreased the quality of the results, a large number of people in this way, achieve the unneeded knowledge and skills in work market. This situation for low income and disadvantaged training is not pleasant and frustrate, therefore, for more effectiveness of the education on social - economic development, it is necessary that at the same time to have structural changes in social dimensions and components structure. Roche in description of the social changes introduces education as a factor of high-strength on social,

2 Akbar Khodabakhshi mental and cultural changes. He believes that education in developing countries causes new forms of human understanding and thinking of the communities and also reason on the recognition and improve development pursues (Roche, 1993). In today's societies, formal education is one of the most important realization tools of the social and political. Base on, Covers by government some major activities in order to supply the resources and investment. Despite that order for the consolidation of training and maintaining the current status and the most important since it aims to train members of society based on the values of the top groups in the community, the importance of knowledge and specialized in the development of society and the role of education in social mobility of individuals and groups, leading to the emergence of a new elite. Public education and higher education in the economic arena as well with the quality improvement and the improvement of human skills and talents, account into the economic development factors. Today economists explain the role of education on economic development with the concept of ' human capital '. Human capital formation and improve the production capacity of human individuals depends on a variety of formal education. With regard to the principles of development, most pundits are emphasizing that economic, political and cultural development in developing countries as in developed countries as well as in need of appropriate changes in population and education structure, So that Michael Todaro refers that what determine process of the social economic development is human resources of the country not the capital of the country and its resources or material (Todaro, 2000: 344). Today, most developing countries accept that key quantitative of national development success in the expansion of educational opportunities. Therefore, for the country such as Iran with rich resources, skilled and efficient deficiency as a desirable educational system can delay settings of the economic growth and development process. Therefore, if the training is really investing in human capital, in that case we can calculate the rate of return on this investment. Read about this return began with the fact that people with more education may be generally have high income, holding that person's income is an effective factor on gross national income, it must be accompanied also by increasing the education, level of per capita income. But the research association is education with per capita income and the purpose of the study achieves it Important of the research Many economists have considered, investing in the education as investing in human resources. They believe that this kind of investment is not separation of human nature and never to separate from him. The investment of the education or human resource is important economic and social returns in future years. It is natural that any country has been problem for this kind of investment, was not successful to development of knowledge and the development of human resources and also occupational skills and judgment skills and creativity in human resources. Because it was not able to upgrade the level of efficiency and expected reliability in their human resources, which is today considered the operation of education. Therefore, education as one of the most important world s development indicators has a key role in development of the countries. In most cases, countries with good education index are also in good situation in development of the indicators Definitions Some variables and key words in this study are defriended as below; X i = Per Capita Income Y i = Education Ŷ = expectation Where X i is as an independent variable which shows per capita income and Y i as dependent variable which shows education index.

3 Review of the Relationship Between per Capita Income and Education as Effective Indicators on Sustainable Development Per capita income: Per capita income is defending the ratio of the natural income to the country's population for a period of one year. This indicator reflects the average income over a year to each of the members of society. In other words, the average income of per person in the country in a year. Measurement of a country's welfare changes, or compare the level of production and prosperity of countries in a given time period, usually measured by this indicator. Education indicator: official development of united nations publish important indicators of development indicators for all countries annually, one of these indicators is education which divided in to the several sub indicators, in this research is used of mean years schooling and literacy as important sub indicators of the education Index Hypothesis Does spread education index have relation to gross natural income or per capita? In this research we assume that there is a relationship between per capita income and education index and will do hypothesis test based on the same premise. 3. Methodology According to the past being selected issue (education index during the years ago) and lack of possibility of changing the variables, the correlation analysis Test and regression analysis tests is applied. Unlike the experimental research the data is not created by the researcher but also all data extracted from Iran's statistics center which has responsibility to collecting all economic data in Iran yearly. The education index data and per capita income relating to years 1978 to Considering the required data have already been collected, any analysis of the available data will be a second analysis or study. The scale of the variables are distance scale type and to prove the hypothesis of the study we used of parametric tests. Parametric tests used in this study are Pearson correlation analysis Test and regression analysis Test. 4. Data Analysis & Figures In the first stage of the data analysis we found that there is a positive relation between education index and per capita income during the last thirty years or after revolution of the Islamic Republic of Iran. The amount is gotten for the Pearson correlation Test was This result shows a weak correlation but positive relation for variables. To doing the hypothesis test for the significant of Pearson we have: [H0: [H1 : The amount is gotten for T test cause to reject the H 0, so it shows that there is a significant for Pearson R. Hear we pay to compute the fixed and variable coefficient in this model. Regression equation and errors of regression model are also computed as below; SST: SSR: SSE: ( )

4 Akbar Khodabakhshi Table1. Data for education index and per capita income during the 1978 to 2007 Year جمع میانگین The Benchmark error (SEE), that shows the accuracy and values predicted of the education rate from the calculated values around the fitted line, indicate that other factors accepted of per capita income as well as explained the changes of variance of the education index.

5 Review of the Relationship Between per Capita Income and Education as Effective Indicators on Sustainable Development 4.1. Regression significant F* = ( )/ ( ) = ~ 46 {H 0; there is no regression significant {H 1; there is regression significant Because of 4.20 accepted., H 0 is rejected and significant of the regression line with 95% confidence coefficient is Table2. Data for Variance of the education index and per capita income ( ) ( ) ( )

6 Akbar Khodabakhshi 5. Conclusion In this research we found that there is a mid-relationship between level of education or education index and per capita income. Also as our hypothesis and using of past thirty years data for education and per capita income we found that per capita income has effect on education and coefficient of this effect is about The meaning when increase a unit of per capita income, its effect on education will be The results showed that this coefficient in level of general, public and high education was different so that in high education is more than general education. It is possible to be effect of education on per capita income also, so these variables have effectiveness on each other and any increasing in one of them causes to increase other. Hence, both education and per capita income as two important indicators can be considerable in reaching the sustainable development. References 1. Rate of the education, manual book of planning and programming organization, I. R.Iran 2. Micel Dodaroo, economic development in third world countries, translated by Gholamali Farjadi(1985). 3. Ahmad Al-Bataineh, The Effect of the Internet on Improving Foreign Language Students', Writing Performance, An-Najah Univ. J. of Res. (Humanities), Vol. 24(4), 2010, Department of Curricula and Methods of Teaching, College of Education, AL al-bayt University, Jordan. 4. Becky P.Y. Loo1 and Agnes Y.P. Wong, Internet Development in Asia-Pacific: Spatial Patterns and Underlying Locational Factors Networks and Communication Studies NETCOM, vol. 16, n 3-4, 2002, p Human Development Report: Asian countries lead development progress over 40 years. 6. Human Development Report 1997, Human Development to Eradicate Poverty, New York. 7. Towards Human Development with Equity, National Human Development Report for Asian countries. 8. Human Development Report 2007/2008.Fighting climate change: Human solidarity in a divided world. New York. 9. International Monetary Fund, Paper prepared for the IMF-NCAER Conference, A Tale of Two Giants: India s and China s Experience with Reform, November 14-16, Web sites: 1) World Bank site 2) Human Development Index Reports. 3) Central Bank of Iran 4) United Nations 5) Statistic Center of Iran