Education is one of the fundamental pillars of human and economic development, and government spending on the education sector is viewed as a long-term investment in human capital. The higher the level and quality of education, the greater the efficiency and productivity of the workforce, which positively impacts economic and social growth rates. From this perspective, this research seeks to analyze the relationship between government spending on education and labor productivity in Iraq during the period (2004–2022), focusing on the extent to which this spending impacts educational outcomes and their alignment with labor market requirements.

Problem of the Study

The research problem is evident in the large gap between the outcomes of the educational system in Iraq and the requirements of the labor market. This indicates the weak quantitative and qualitative impact of government spending on education in enhancing labor productivity. Despite the allocation of portions of the general budget to this vital sector, the impact of this spending has not been sufficient to achieve the goals of economic and social development.

Significance of the Study

The importance of this research stems from its addressing one of the most important issues in contemporary development economics: the effectiveness of public spending in improving the quality of human capital. It highlights the feasibility of government spending in the education sector as a strategic tool for increasing labor productivity and stimulating economic growth, particularly in a country like Iraq, which boasts significant but under-utilized human resources.

Hypothesis of the Study

The research is based on the hypothesis that:

"Increasing effective government spending on the education sector leads to increased labor productivity in Iraq, provided that this spending is accompanied by administrative efficiency and sound educational planning."

Objectives of the Study

1. To provide a theoretical foundation for the role of government spending on education in increasing labor productivity.
2. To analyze the evolution of education spending and its impact in Iraq during the period 2004–2022.
3. To measure the relationship between the volume of education spending, the number of graduates, and the productivity of workers in the Iraqi economy.

Methodology of the Study

Descriptive-Analytical Approach: To analyze the theoretical literature related to government spending, education, and labor productivity.

Standard Quantitative Approach: To test the validity of the hypotheses using the Autoregressive Distributed Lag (ARDL) model to measure the relationship between the variables under study in the short and long term.

1. Research Boundaries:

Spatial Boundary: The Republic of Iraq.

Temporal Boundary: The research spans the period from 2004 to 2022.

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