Human Capital Investment and Poverty Rate in Nigeria

Abstract

This study examined the relationship between human capital investment and poverty rate in Nigeria. Human Capital Investment was proxied by capital expenditure on education, recurrent expenditure on education, capital expenditure on health, recurrent expenditure on health and tertiary enrolment, while poverty rate is measured using national poverty index. Relevant data were extracted from the annual Statistical Bulletin of the Central Bank of Nigeria. Unit root test was conducted using Augmented Dickey Fuller method which revealed that the variables were integrated at level and first difference necessitating the use of autoregressive distributive lag/bound test to explore the long run relationship existing among the variables in the model and the result showed that the variables were co-integrated; thus, depicting the presence of long run form. From the result of the various tests, it was revealed that there is a significant relationship between the proxies of human capital investment and poverty rate in Nigeria. The study consequently, concluded that human capital investment on education, health and tertiary enrolment significantly affects poverty rate in Nigeria. Based on the findings from the analysis, the study recommended amongst others, that; the government of should strive to increase investments in the areas of education and health so as to improve on the quality of education and healthcare facilities and as such, the quality of the human resources that could be instrumental to the achievement of desired economic growth, increasing the per capital income of citizens and reducing the poverty rate of the country; the reforms of the federal government of Nigeria relating to the education and health sectors of the economy as provided in the NEEDS document, should be sustained by the government with great commitment and will.