Human Capital Investment and Economic Growth in Nigeria: An Econometrics Analysis, 1981-2019

Abstract

This study investigated the effect of human capital investment on economic growth in Nigeria within the periods 1981-2019. Time series data covering these periods of study were obtained and analyzed using Ordinary Least Square method. The data were further subjected to unit root test using the Augmented Dickey-Fuller (ADF) test, and a test of co-integration was performed using Johansen rank based test. The result of the ADF test showed that the variables were all integrated at order one, and the Johansen co-integration test confirmed the existence of at least a co-integrating equation. The researchers went further in estimation an Error Correction Model (ECM) aimed at reconciling the short run deviations from the long run equilibrium. The test results showed that capital and recurrent expenditures on education and health have not impacted significantly on the growth of the Nigerian economy both in the short run as well as the long run periods. Recommendations proffered include; government should intensify investments in education and health sectors in Nigeria to improve quality of services; government should embark on a general upgrade of the health sector in Nigeria as well as provision of adequate educational facilities in public schools.

DOI: 10.7176/JESD/11-18-05

Publication date:September 30^th 2020