The Impact of Human Capital Development on Economic Growth in Nigeria

Abstract

This study investigates the impact of human capital development on economic growth between 1986 and 2018 in Nigeria. The study employs the OLS, Cointegration test and causality test approach and the result of the study revealed that the effect of government recurrent expenditure on education (EDUC) is positive but statistically insignificant at 5percent level of significance. The impact of government expenditure on health (HLTH) for the period of 1987 to 2016 had positive impact on real output as expected but is insignificant at 5percent level of significance in explaining the level of the output. The coefficient death rate (DER) is  positively signed as expected but statistically insignificant at 5 percent level of significance. This confirms the basic thesis of the Harrod-Domar Growth Model. The theory recogniserecognised the role of human capital stock. Thus, the increase in a country’s mortality rate decreases the economy’s potential output. The result of causality test shows that EDUC does not Granger causes RGDP but RGDP does. Therefore, the conclusion is that there is a one-way causation running from RGDP to EDUC. However, there exist no causation between HLTH and real output