Human Capital and Economic Growth in Nigeria: Does Life Expectancy and Schooling Matter?

Abstract

This paper examines the economic growth effect of human capital in Nigeria using annual time series dataset spanning 1970 to 2017. Life expectancy and schooling were the human capital components considered while the growth rate of Gross Domestic Product captures economic growth. The Two-Stage Least Squares approach was adopted in the analysis after testing for unit root and cointegration among variables. Results indicate that both physical and human capital exerts a significant positive impact on economic growth in Nigeria. Specifically, life expectancy, secondary and tertiary school enrolments - components of human capital - significantly spur economic growth while primary school enrolment and average years of schooling have no significant effect on the economic growth of the country. The paper recommends, amongst others, that all levels of government should raise the percentage of health and education funds in their financial disbursement for optimal performance of the economy.

Keywords: Life expectancy, Schooling, Human Capital, Economic Growth, Two-Stage Least Squares.

DOI: 10.7176/JESD/11-16-10

Publication date:August 31^st 2020