The Effect of Education on Economic Growth of Iran During the Years 1971-2003

Since 1930s, much of attention of macroeconomists have focused on economic growth model, so that it progressed notably in some dimensions such as the kind of production function and its inputs, diminishing or increasing returns to accumulation of physical and human capital.Befor 1960s, only physical capital was the important factor in production function in growth model, but endogenous growth model had a key role to introduce human capital in production function. These days, in applied economics, reaserchers use investment in education as a proxy for human capital.In this paper,by using Lucas endogenous growth model and micro data which is gathered by SCI and macro data which is gathered by CBI, we showed that labour formal education as a proxy for human capital has a positive effect on economic growth of Iran during 1972-2003.