IMPACT OF HUMAN CAPITAL DEVELOPMENT ON THE ECONOMIC GROWTH OF NIGERIA
Abstract
This study uses annual time series data from 1985 to 2023 to investigate how human capital development affects Nigeria's economic growth. While real Gross Domestic Product (RGDP) is utilized as a stand-in for economic growth, the study focuses on important indicators of human capital development, such as government spending on health care, education, labour productivity, inflation, and private capital investment. The Autoregressive Distributed Lag (ARDL) model is used in the study to examine the relationships between the variables over the short and long terms. The results of the unit root and limits cointegration tests show that human capital development and economic growth in Nigeria have a steady long-term relationship. The long-term findings demonstrate that while inflation has a negative but negligible impact on economic growth, labour productivity, health spending, and education spending all have positive and statistically significant benefits. While labour productivity continues to be a significant growth driver in the short term, investments in health and education have adjustment effects before producing good results. The study comes to the conclusion that continued investment in healthcare and education is crucial for boosting innovation, increasing productivity, and fostering long-term economic growth in Nigeria. Therefore, the study suggests policies targeted at enhancing labour productivity and macroeconomic stability, more government investment in the health and education sectors, and effective use of public monies.
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