The Role of Higher Education on Economic Growth in EthiopiarnKidist Ibrie YasinrnAddis Ababa University, 2012rnThe re is no study that has explicitly shown higher education 's role to economic growth inrnElhiopia; neither its contribution to output growth in general nor the relative importancernot the two major streams -social science and natural science- in particular. With thernobjective of assessing the role of higher education to economic growth and identifY thernrelafively more important stream, either social science or natural science, the Â·tL/dyrnexamines the role of higher education graduates to output growth in Ethiopia for thernpaiod 1980-2011 . lr splits total graduates into social and natural science streams tornexamine their relative significance to output growth in the coUntlY. Thus, three growthrnequations are estimated using long-run (co-integration) and short-run (error correction)rnmethods. Proxies to human capital in each of the three growth equation are rotalrngraduates, social science graduates and natural science graduates respectively. Thernstudy finds positive and significant effect of total graduates in output growth both in thernlong run and shortrun periods. It also finds a positive and significant coelJicient fo r bothrnof'the streams in the long and shortrun periods. Moreover, the coefficient of socialrnscience is relatively higher than the natural science. Hence, this study recommend rherngovernment 10 invest more on higher education since graduates are positively andrnSignificantly affecting economic growth of the countly. However, the current priority {ornnotllret! science stream in Ethiopia is questionable and needsjitrther investigation