HUMAN CAPITAL DEVELOPMENT: A KEY TO SUSTAINABLE DEVELOPMENT IN NIGERIA

Abstract

This study evaluated the impact of human capital development on the Nigerian economy from 1981-2017, based on the endogenous growth theory. The independent variables of the study include public expenditure on health, primary, secondary and tertiary school enrolments, life expectancy rate, gross capital formation and real GDP which were obtained from Central Bank of Nigeria Statistical Bulletin (2018) and World Bank World Development Indicators (2018). The estimation techniques used include correlation, Granger causality test, Johansen co-integration technique and the error correction mechanism. Findings of the study showed that current year life expectancy ratio, last year stock of capital and last year secondary school enrolment had positive influence on GDP. Also, public expenditure on health for both current year and one year lagged value, a year lagged value of primary school enrolment and a year lagged value of tertiary school enrolment negatively impacted on the Nigerian economy. The implication of this result is that for the desired improvement in the Nigerian economy to materialize, there is the need for policy makers to consider increasing expenditure on education, particularly primary and tertiary levels of education. Also, more funds should be allocated to the health sector in order to provide the necessary facilities that will enhance the contribution of the sector to the well-being of citizens and indirectly to economic growth.