Human Capital Development and Poverty in Nigeria, 1960 - 2009: An Econometric Assessment

Abstract

This study examined the relationship between human capital development and poverty in Nigeria using data spanning 1960-2009. The human capital development variable was measured using conventional variables i.e. education and health, with government expenditures on education and health being used as the proxies. Other variables on  communication, transportation and utility were used as control. A readily available poverty measure, gross domestic product per capita was used to capture poverty status. This is based on the fact that poverty is mostly measured in monetary terms captured by income or consumption per capita or household in the absence of direct primary data observation. After carrying out the diagnostic tests, the cointegration analysis carried out proved that, to some extent, a cointegrating relationship exists between the poverty measure and human capital development indicators. However, the Granger causality estimation results show that both education and health expenditures are fundamental in reducing poverty level based on the uni-directional causality while no causality runs from poverty status to the indicators.

Keywords: Poverty, Human Capital Development, Cointegration, Granger Causality