Abstract
The role of human capital formation in economic growth and development has been highly underestimated in Nigeria. The study at this moment attempts to create an insight into the importance of human capital formation using real GDP per capita, government expenditure on health, government expenditure on education and primary school enrolment in the case of Nigeria. It used time series data from 1980 to 2017 and employed OLS regression technique, Johanssen cointegration and Granger causality test. The results from the various methods utilized affirmed the importance of human capital formation towards actualizing economic growth and development in Nigeria. The ordinary least square regression result showed a positive relationship between Government capital expenditure on health, Education and primary school enrolment. The Johanssen cointegration result showed cointegrating vectors in both the trace and maximum Eigenvalue test. The results from the Granger causality test indicated a bi-directional between primary school enrolment and Real GDP, a Uni-directional relationship between real GDP and government capital expenditure on health and education. The study strongly recommends a more budgetary capital allocation to health and education. The study went further to suggest strategies that would ensure the increase in primary school enrolment.
Highlights
Human capital formation refers to a process that involves the employment of various strategies and policies with the sole aim of equipping the labor force of a country with requirements that will enhance the performance of affect productivity of labor positively.Nigeria is a country with a population estimated at 180 million and a population growth rate of 2.3%
Human capital refers to the talents and expertise of a labor force, while human capital formation is the practice of investing in skills, education and experience that are imperative to the actualization of sustainable economic growth and development of an economy
With average life expectation measured at 41 years, high child mortality rate and more than 60% of its population living below poverty line, Nigeria are ranked 20th in Africa and 152nd in the world regarding Human Development Index
Summary
Human capital formation refers to a process that involves the employment of various strategies and policies with the sole aim of equipping the labor force of a country with requirements that will enhance the performance of affect productivity of labor positively. Human capital refers to the talents and expertise of a labor force, while human capital formation is the practice of investing in skills, education and experience that are imperative to the actualization of sustainable economic growth and development of an economy. Reasonable importance is attached to the accumulation of physical capital at the expense of human capital in Nigeria’s pursuit for quick economic growth and development. Nigeria as a country is currently directing efforts toward emerging among the most developed nations in the world shortly. This aspiration is destined to be a failed endeavor unless human capital formation tops the priority list. Though there is a reasonable amount of publications on the importance of human capital formation on economic growth or development, none of the papers examined investigates the precise implication of human capital formation on both economic growth and development simultaneously in Nigeria over an extended period
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