Education, by directly affecting the improvement of the quality of human capital, leads to an increase in the capabilities, skills, and knowledge of the workforce. Efficient human capital will pave the way for sustainable economic growth by enhancing the productivity of total factors of production. Therefore, government investment in the education sector can be considered one of the most effective policy tools for improving productivity. The Present study examines the effect of government education expenditures on total factor productivity in Iran using time series data from 1993 to 2024. The Hall and Jones method was used to calculate human capital, and the interaction effects of variables have been examined using the two-stage least squares method in a system of simultaneous equations. The research findings show that government educational expenditures have a positive and significant effect on human capital, such that an increase of one unit in government educational expenditures increases human capital by 0.095 units. Furthermore, human capital has had a positive and significant effect on total factor productivity, and a one percent increase in human capital has led to a 0.113 percent increase in total factor productivity. The results showed that increasing government investment in the education sector not only leads to improving the level of human capital, but also paves the way for the country's economic growth and development by improving total factor productivity. Accordingly, it was suggested that policymakers should allocate a greater share to the education sector by optimizing the composition of government spending.