Human Capital Development and Economic Growth in Nigeria: Evidence from 1986 -2024
DOI:
https://doi.org/10.54554/jhcd.2026.19.1.12Abstract
This study investigates the impact of human capital development on economic growth in Nigeria over the period 1986 to 2024. The continued low growth and high poverty rate in Nigeria despite budgetary allocations on public spending raises concerns on the role and effectiveness of human capital investment in inducing growth. Anchored on the neoclassical growth and human capital theory, the study investigates how expenditure on education and health translate to economic growth in Nigeria. Using secondary data and a number of techniques such as the Ordinary Least Square (OLS), Johansen co-integration and Error Correction model (ECM), the results revealed the existence of a long-run relationship between human capital development indicators and economic growth in Nigeria. More so, the OLS result shows that government expenditure on education and secondary school enrolment do have a positive and significant impact on economic growth, while government expenditure on health is positive but insignificant due to inefficiencies, quality issues and structural challenges. The study concludes that human capital development is fundamental and significantly linked to economic growth in Nigeria, with education having a stronger impact than health. It therefore recommends increased and efficient allocation of budgetary resources to education and health, skills development programs with policies that will improve labour productivity in order to harness the full growth potential of human capital in Nigeria.
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