Examination of the Long-run relationship between Human Capital Development and Economic Growth in Nigeria

Abstract

Abstract: The study explores existence of long run relationship between human capital development and economic growth in Nigeria using secondary data obtained from CBN statistical bulletin for the period of forty years between 1981-2020. The following independent variables were used as the proxies and areas in which human capital could be enhanced and needed to be developed; Agriculture (AGR), Civil-Service (CIVSER), Education (EDU), Health (HLTH), Manufacturing (MANU) and Transportation (TRANSP) sectors of Nigerian economy from 1981 to 2020 as while Gross Domestic Product (GDP) stands for economic growth. The Augmented Dickey-Fuller (ADF) test statistic for ascertaining whether the variables have unit root and Johanson test of co-integration were employed to examine existence of long run relationship between the variables under examination. It was found that variables are stationary at first difference with the level of significance which is 0.0000 for all the variables. The Co-integration of the variables is shown in Tables 3 and 4 where the Unrestricted Co-integration Rank Test (Trace) and Unrestricted Co-integration Rank Test (Maximum Eigen value), respectively, show that the independent variables (all the proxies of Human Capital Development) are co-integrated to determine the dependent variable (GDP which is proxy for economic growth) adjudging that there is long run relationship between human capital development and economic growth.