It is recognized that education investment has remarkable effect on economic growth. The author uses each province as the cross section units, and then makes use of the time series data from 1998 to 2007 to establish panel data to research fiscal education expenditure and economic growth. The results demonstrate that there is a long-term cointegration between fiscal education expenditure and economic growth. The paper applies fully modified OLS and dynamic OLS to estimate elasticity. Finally, some suggestions are proposed.