IMPACT OF HUMAN CAPITAL AND ECONOMIC GROWTH ON POVERTY RATE IN NIGERIA

Abstract

This study examines the impact of human capital and economic growth on the poverty rate in Nigeria. Theoretical models and several empirical evidences suggest that human capital is an important way to counter the growing poverty rate in Nigeria. Recent studies show increasing positive relationships between human capital and economic growth on poverty reduction levels on the Nigerian economy. The objectives of the study were to examine the impacts of human capital and economic growth on poverty rate in Nigeria. This study is undertaken to examine the impact of relationship between human capital and economic growth on poverty rate in Nigeria using time series data which covered the period of 1985-2018. Adopting the human capital theory, the following econometric tests were carried out; Unit root test, Co-integration test, Correlation and Granger Causality tests, analysis indicated that there was no significant impact of economic growth on poverty rate in the specified period while Real Government Expenditure on Education had uni-directional causality with the dependent variable. Findings from the study showed that human capital had positive impact in areas of education and health but economic growth had no significant contribution to poverty rate in the economy, conclusion was drawn that only Government Expenditure on Education contained information that could be used to explain the changes that occur in the dependent variable poverty. The study then proffered the need for government to continue developing and improving the education and health sectors as it is important for economic development in the economy