ABSTRACT

This study evaluated the influence of human capital development on economic growth in Nigeria. The study covers the period of 1981 to 2019. The study seeks to: examine the influence of education expenditure on economic growth in Nigeria; investigate the effect of school enrolments on economic growth in Nigeria; investigate the existence of long-run relationship between labour force and economic growth in Nigeria; determine the nature of the causal relationship between health expenditure and economic growth in Nigeria; and to determine the nature of the causal relationship between life expectancy at birth and economic growth in Nigeria. The study utilized the Ordinary Least Square technique and made use of cointegration and Granger Causality test to analyse the specific objectives. The variables include gross domestic product (a proxy for economic growth), government expenditure on health, government expenditure on education, life expectancy at birth, school enrolments, and labour force. The study found out that expenditure on education has a negative influence on gross domestic product. It has been also discovered that there exists a long run relationship between human capital development and economic growth. The Granger Causality test also reveals there is a causality between health expenditure and economic growth as well as between life expectancy at birth and economic growth. Meanwhile, no causality exists between primary school enrolment and economic growth. Since the expenditure on education exerted a negative influence on economic growth, the policy implication is expenditure on education have not been sufficient to trigger growth. Based on the findings, the study recommended among other things that the planned strategies of the government in the education and health sectors as enunciated in the National Economic Empowerment and Development Strategy document should be fully carried out with reports provided of progress made at each stage. The government should increase not just the amount of expenditure made on the education and health sectors, but also the percentage of its total expenditure accorded to these sectors. The study recommended that the ten percent benchmark proffered by the present National Plan should be adopted.