Demographic transition, education and economic growth in Tunisia

This paper provides empirical evidence supporting the interaction between fertility, education and economic growth through the underlying mechanism behind that correlation in accordance with Becker's theory. In consistency with the theory, the key explanatory variables in Tunisia's fertility model are real GDP per capita, infant mortality, contraceptive use ratio, and education. As opposed to most empirical works, the present study takes into consideration three educational levels, i.e., primary, secondary and higher. Also unlike most empirical research, this study attempts to analyse the impact of fertility transition on education and economic growth. To deal with too little or incomplete data, time series data for Tunisia are computed over 45 years. A multivariate cointegration analysis is carried out and shows that a long-term triangular relationship exists. A short dynamic run analysis based on the vector correction error model displays results in coherence with and close to those of the long term. Among our key results, education is found to trigger fertility transition both in the short and long run. In addition, education has relatively fostered economic growth but hardly boosted it through its dynamic interaction with fertility. Furthermore, the variance decomposition and the impulse function show that the fertility transition has produced a feedback effect on both education and economic growth.