Human Capital Development and Macroeconomic Performance in Nigeria: An Autoregressive Distributed Lag (ARDL) Approach

Open access

Abstract

While developed and most developing nations have seen the need and continue to invest heavily in the development and training of her manpower as shown by huge budgetary allocations to education and health, Nigeria continues to play politics with her human capital development policy which has been poor and only been effective on paper despite the huge outlay of human capital available at our disposal. This study therefore examined the impact of human capital development on the macroeconomic performance of Nigeria. Using autoregressive distributed lagged model, the study proxied human capital development using government expenditure on education, government expenditure on health, secondary school enrolment rate, and school enrolment rate at tertiary level, while per capita GDP was used as proxy variable for measuring macroeconomic performance.

The results of the estimated short and long run ARDL models indicated, an insignificant and negative relationship between human capital development and gross domestic product per capita (GDPPC) in the short run. Another result of this study is that, only tertiary enrolment rate (TER) has a significant and positive impact on gross domestic product per capita (GDPPC). This finding was an indication of relatively good but insufficient efforts by government to boost human capital. The study concluded that while human capital development is crucial for accelerated macroeconomic performance, government efforts aimed at boosting human capital has had a depressing effect on macroeconomic performance. On the strength of this, the study recommended that government and economic policy makers in Nigeria should place greater emphasis on human capital development.

If the inline PDF is not rendering correctly, you can download the PDF file here.

  • Adak M. (2015). Technological progress innovation and economic growth; the case of Turkey. Procedia – Social and Behavioural Sciences 195 776-782.

  • Adamu P. A. (2003). The impact of human capital formation on economic development in Nigeria: An error correction approach. (pp. 55-78). Ibadan: Human Resource Development in Africa Selected Papers for 2002 Annual Conference Nigerian Economic Society.

  • Adawo M. A. (2011). Has education (human capital) contributed to the economic growth of Nigeria? Journal of Economics and International 3 (1) 46-58.

  • Ajide B. K. (2014). Determinants of economic growth in Nigeria. CBN Journal of Applied Statistics 5 (2) 147-170.

  • Akeju K. F. & Olanipekun D. B. (2014). Unemployment and economic growth in Nigeria. Journal of Economics and Sustainable Development 5 (2) 138-144.

  • Ali S. Alam K. J. & Noor M. T. (2006). An econometric analysis of human capital development and economic growth in Bangladesh. Journal of Economics and Sustainable Development 7(17) 30-38.

  • Bhattacharjee J. & Haldar S. (2015). Economic growth of selected South Asian countires: does institution matter? Asian Economic and Financial Review 5 (2) 356-370.

  • Caliskan H. K. (2015). Technological change and economic growth. Procedia – Social and Behavioural sciences 195 649-654.

  • Dauda R. O. (2010). Investment in education and economic growth in Nigeria: an empirical evidence. International Research Journal of Finance and Economics 27 (2) 158-169.

  • Dauda S. R. (2016). Poverty and Economic growth in Nigeria: Issues and policies. Journal of Poverty 21 (1) 61-79.

  • Eigbiremolen G. O. & Anaduaka U. S. (2014). Human capital development and economic growth: The Nigeria experience. International Journal of Academic Research in Business and Social Sciences 4 (4) 25-35.

  • Hanushek E. A. (2013). Economic growth in developing countries: The role of human capital. Economics of Education Review 37 204-212.

  • Hanushek E. A. & Woessmann L. (2016). Knowledge capital growth and the East Asian Miracle. Science 351 (6271) 344-345.

  • Ibok E. F. & Ibanga S. E. (2014). The impact of human capital development and economic development and economic development on socio-economic empowerment of Akwa Ibom State Nigeria. Global Journal of Human Resources Management 2 (3) 37-44.

  • Idenyi S. Eze O. & Onyeisi S. (2016). Analysis of the relationship between human capital development and economic growth in Nigeria. European Journal of Accounting Auditing and Finance Research 4 (3) 56-71.

  • Isola W. A. & Alani R. A. (2012). Human capital development and economic growth: empirical evidence from Nigeria. Asian Economic and Financial Review 2 (7) 813-827.

  • Jaiyeoba S. V. (2015). Human capital investment and economic growth in Nigeria. African Research Review 9 (1) 30-46.

  • Johnson A. O. (2011). Human capital development and economic growth in Nigeria. European Journal of Business and Management 3 (9) 29-38.

  • Lucas R. (1988). On the mechanics of economic development. Journal of Monetary Economics 22 (1) 3-42.

  • Mankiw N. G. Romer P. & Weil D. (1992). A contribution to the empirics of economic growth. uarterly Journal of Economics 107 (2) 407-438.

  • Mohsen M. & Maysan M. (2013). The relationship between economic growth and human capital development in development countries. International Letters of Social and Humanistic Sciences 5 55-62.

  • Musibau M. & Rasak A. A. (2005). Long run relationship between education and economic growth in Nigeria: evidence from the Johannsen’s cointegration approach. Senegal: Paper presented at the Regional Conference on Education in West Africa Cornell University.

  • Ogujiuba K. (2013). The Impact of human capital formation on economic growth in Nigeria. Journal of Economics Kamla-Raj 121-132.

  • Ogunde A. (2011). Nigeria 2012 budget highlights: how government plans to spend your money. BusinessNews. Retrieved December 13 2011 from https://businessnews.com.ng/2011/12/13/nigeria-2012-budget-

  • Oluseye I. C. & Gabriel A. A. (2017). Determinants of inclusive growth in Nigeria: an ARDL approach. American Journal of Economics 7 (3) 97-109.

  • Oluwatobi S. O. & Oluranti O. I. (2011). (2011). Government expenditure on human capital development: implications for economic growth in Nigeria. Journal of Sustainable Development 4 (3) 72-80.

  • Omolara C. A. & Timothy C. A. (2014). Human capital and economic growth: a three stage least squares approach. Journal of Economics and Sustainable Development 5 (5) 121-137.

  • Owolabi-Merus O. (2015). Infrastructure development and economic growth nexus in Nigeria. International Journal of Academic Research in Business and Social Sciences 5 (1) 376-382.

  • Oziengbe S. (2013). The relative impact of Federal capital and recurrent expenditures on Nigeria’s economy (1980-2011).. American Journal of Economics 3 (5) 210-221.

  • Pelinescu E. (2015). The impact of human capital on economic growth.. Procedia Economics and Finance 22 184-190.

  • Pesaran M. H. Shin Y. & Smith R. J. (2001). Bounds testing approaches to the analysis of level relationships. J. Appl. Econ 16 289-326.

  • Raheem I. D. Isah K. O. & & Adedeji A. A. (2013). Inclusive growth human capital development and natural resource rent in SSA. Econ Change Restruct (2016) 1-20.

  • Riley G. (2012). Tutor2u. Retrieved 11 18 2017 from https://www.tutor2u.net/economics/reference/economic-growth-human-capital

  • Romele L. (2013). Human capital development and economic development in Latvia.. European Scientific Journal 9 (31) 53-63.

  • Romer P. (1990). Endogenous technological change. Journal of Political Economy 98 (5) 71-102.

  • Sede P. I. & Ohemeng W. (2015). Socio-economic determinants of life expectancy in Nigeria (1980-2011). Health Economics Review 5 (2) 1-11.

  • Su D. & Yao Y. (2016). Manufacturing as the key engine of economic growth for middle-income countries. Japan: ADB Working Paper 573. Available at SSRN:https://ssrn.com/abstract=2784095.

  • UNDP. (2016). Human Development Report 2016. New York: United Nations Development Programme.

  • Vanguard. (2015). Budget breakdown as Education Ministry gets N369.6 billion.. Retrieved December 22 2017 from https://vanguardngr.com/2015/12/budget-breakdown-as-education-ministry-gets-n369-6-billion/

  • World Bank. (2014). World Development Report 2014. Washington D.C: World Bank.

  • Yakunina R. P. & Bychkov G. A. (2015). Correlation analysis of the components of the human capital development index across countries. Procedia Economics and Finance 24 766-771.