The result indicated that human capital development has a significant impact on nigeria s economic growth. This paper benefits from country specific data on migration to examine its effect on nigeria s human capital formation and economic growth. Furthermore, evidence from developed countries suggests that human capital has been the major driver of their development process. Economists observed that the development and utilization of human capital is important in a nations economic growth. The ordinary least square multiple regression was used to estimate the necessary models. Introduction human capital is recognized as an agent of national development in all countries of the world. Human capital formation and economic growth in nigeria eric. Abu hassan shaari abstract there can be no significant economic growth in any country without adequate human capital development. It has been argued that economic growth is attached more to the accumulation of physical capital than human capital barro, 1997. Pdf human capital is an important factor used in converting all resources to mankinds use and benefit. Welcome to the human capital project hcp, a global effort to accelerate more and better investments in people for greater equity and economic growth. In order to achieve this, data were sourced from the cbn statistical bulletin and federal ministry of education publication during 1970 2011.
Underminding it infrastructure is underminding the growth and development of nigerian economy. Pdf human capital investment and economic growth in nigeria. The impact of human capital formation on economic growth in. Specifically, firms must invest necessary resources in developing human capital which tend to have a great impact on performance. Insight report the global human capital report 2017.
The impact of human capital development on economic growth in. Role of educational investment on economic growth and. This study examined and analyzed the impact of human capital development on economic growth in nigeria, using time series data of 32 years spanning 1980 to 2012, data utilized for the study were extracted from secondary sources i. This paper examines specifically the impact of human capital development on longrun economic growth in nigeria, using time serial data for 27 year period.
What is the relationship between human capital and economic. The role of human capital in the growth process of any nation is crucial. We employed annual time series data for the period of 35 years 19752010 and applied autoregressive distributed lag approach to cointegration to examine the relationship between human capital, technology, and economic growth. The objective of this study is to critically evaluate the effect or impact of human capital development on economic growth in nigeria, using quarterly data. Providing education and health services to people is one of the major ways of improving the quality of human resources. Contrary to malthus, economic growth has not been eliminated by population growth. Furthermore, the country continues to face massive developmental challenges, which include the need to reduce. The effect of human capital development on economic growth in. Phd department of banking and finance faculty of management sciences ekiti state university, ado ekiti, nigeria pmb 5363, ado ekiti, nigeria email. I consider first the role of human capital in the familiar. From the result, it is clear that infrastructure is an integral part of nigeria economic growth. Impact of human capital development on economic growth in nigeria. The nigerian economy remains dependent on the small oil sector under 10 percent of gdp for the bulk of its fiscal revenues and foreign exchange earnings. The nigeria biannual economic update is a product of the staff of the world bank and has three broad aims.
Matters of economic of growth and decline hinge on the population. Also, most of the typically scanty empirical attempts have been, in the main, conducted at the crosscountry levels, thus, making it quite difficult to extrapolating to countryspecific cases. First, it reports on the key developments in the nigerian economy in the recent past. This article investigated the impact of human capital and technology on economic growth in nigeria. The nigeria economic recovery and growth plan ergp. Impact of human capital development on economic growth of. Human capital development and economic growth in nigeria ojo johnson human capital is an important factor used in converting all resources to mankinds use and benefit. However, there is still a missing gap on the joint influence of human capital investment components on economic growth particularly in nigeria. This is called human capital, and to truly understand the world, we must understand the role that populations play in an economys growth or decline.
Despite the growth of the nigerian economy, poverty is still on the increase and this calls for a shift from monolithic oilbased economy to a more plural one with agriculture being the lead sector. Economic growth, human capital development, nigeria jel code. However, this study shall look at both the impact of human capital and health on economic growth in nigeria. The accumulation of human capital through education and onthejob training fosters economic growth by improving labour productivity, promoting. Pdf the impact of human capital development on economic. Human capital and economic growth have a strong correlation. Ajide1 this paper investigates the role of frazer economic freedom index on fdigrowth relationship over the period spanning 1980 through 2010 using annual time series data. The overall objective of the paper is to investigate the.
This study employs the augmented solow humancapitalgrowth model to investigate the impact of human capital development on national output, a proxy for. Inclusive economic growth ensures africans can reach their full potential and are on a path to prosperity. This study was therefore carried out with the view to testing the effect of human capital development on economic growth in nigeria. Human capital is a link which enters both the causes and effects of these economic demographic changes. Pdf this study employs the ordinary least square regression analysis to examine the impact of human capital development on economic. Human capital affects economic growth and can help to develop an economy by expanding the knowledge and skills of its people. Hence human capital formation is undoubtedly the pivot for any meaningful programme of socio economic development of nigeria. While nigeria has made some progress in socioeconomic terms in recent years, its human capital development remains weak due to underinvestment and the country ranked 152 of 157 countries in the world bank s 2018 human capital index. This is also of importance for politicians when it comes to setting policies for an efficient labor market and for further economic growth. Gary becker human capital 1964 in his view, human capital, is determined by education, training, medical treatment, and is effectively a means of production. Human capital variables and economic growth in nigeria. Dauda2010, in his study on human capital formation and economic growth in.
This paper examined the impact of human capital development on economic growth in nigeria using time series data spanning from 1980 to 20 which were sourced from the world bank indicator and national bureau of statistics. Benhabib and spiegel 1994 have shown that the introduction of human capital as a factor of production by function type coob douglas leads to its insignificant effect on growth of gdp per capita, but if taken into account the influence of human capital on total factor productivity, the effects are visible in two aspects. Harnessing individual potentials of africas human capital is the most sustainable key to economic transformation and social progress. Nigeria biannual economic update investing in human capital. Jul 28, 2019 human capital and economic growth have a strong correlation. Dauda2010, in his study on human capital formation and economic growth in nigeria used the.
Human capital development and economic growth in nigeria. Given the harsh reality and the lack of capital to invest, the focus switched to increasing employee, organizational, national, and regional productivity through human capital formation and how the identified strategies would enable caricom to be a player in the global economy and foster economic and social growth within the region eclac, 2003. Agricultural production and economic growth in nigeria. It was recommended that pro poor policies should be designed for. Section 3 and 4 present methodology and analysis of the data collected, while section 5 concludes the study. Human capital development is therefore a prerequisite for economic growth and development, as well as a necessary and sufficient condition for poverty reduction in nigeria. What is the relationship between human capital and. Human capital in theories of economic growth various theoretical models include human capital as a factor of production and assess the accumulation of human capital as an element of the growth process. Using the income measurement approach, the study examined the nexus and causality between human capital development and economic growth in the long run economic growth in nigeria. Human capital refers to the abilities and skills of human resources and human capital development refers to the process of acquiring and increasing the number of. Nigeria biannual economic update investing in human.
This study explores the relative impact of human capital formation on economic growth in nigeria from 1981 to 2014 using time series data of thirty four 34. The effect of human capital development on economic growth. The study has shown that infrastructure is an intermediate goods and service for the real sector and a finished goods and service for consumers. Yet, it was previously shown that kenya trained workforce are poor in job creation especially the trained graduates who find it difficult to create. This paper examines the impact of human capital formation on the economic growth of nigeria from 19752008. Infrastructural development and economic growth in nigeria. Increased human capital explains the differential of income for graduates. Unfortunately, successive governments in nigeria have continued to pay lip services to the issue of investment in education. The concept of human capital refers to the abilities and skills of human resources of a country, while human capital development refers to the process of acquiring and increasing the number of persons who have the skills, education and experience that are critical for economic. There can be no significant economic growth in any country without adequate human capital development. Human capital development african development bank. More specifically, each of the various components of human development is likely to have a distinct impact on economic growth. Impact of human capital development on economic growth in. Thus human capital development is one of the fundamental solutions to enter the international arena.
The impact of human resource development on economic growth. An empirical study based on timeseries data from 1992 to 2012 conducted by eigbiremolen and anaduaka 2014 in nigeria considers that human capital development in nigeria has positively. The impact of human capital development on economic growth of nigeria. It specified an equation predicated on the new economics of labour migration nelm considering migration. Determinants of economic growth in nigeria kazeem b. However, the illiteracy rate in nigeria is high and many workers are unskilled, leading to their low productivity. Human capital definition and importance economics help. Jan 15, 2011 human capital formation involves investment in education, training, health and other social services that will enhance the productive capacity of labour. Current estimates are that the number of youth will double to 850 million by 2050 and that nearly 38%.
Investing in human capital for nigerias future english. With the current covid19 pandemic, its even more important to understand why countries should invest in human capital hc and protect hardwon gains from being eroded. Hence human capital formation is undoubtedly the pivot for any meaningful programme of socioeconomic development of nigeria. Escaping malthus according to many economic historians, real wages in europe were stagnant from at least 1200 to about 1800 allen 2001, clark 2005, 2007a, 2007b. What is the role of human capital in economic development. The impact of human capital on economic growth sciencedirect. Pdf human capital investment and economic development. Human capital affects economic growth and can help to develop an economy by expanding the knowledge and skills of. Request pdf the impact of human capital formation on economic growth in nigeria the importance of human capital formation concept on economic growth cannot be over emphasized and have been the. The link is made explicit in what is termed investment in humans. The global human capital report 2017 vii how nations develop their human capital can be a more important determinant of their longterm success than virtually any other factor. By human capital we mean the knowledge and skills people possess that enable them to create value in the global economic system. Investing in human capital for nigerias future 3 preface the nigeria biannual economic update is a product of the staff of the world bank and has three broad aims. Pdf human capital development and economic growth in nigeria.
Impact of human capital development on economic growth. This study employs the ordinary least square regression analysis to examine the impact of human capital development on economic growth of nigeria, using annual time series date from 1981 to 2015. The impact of human capital formation on economic growth. Human capital formation involves investment in education, training, health and other social services that will enhance the productive capacity of labour. Apart from being issues of social concern, both provide an economy.
Bundell and others 1999 analyzing the impact of human capital on economic growth believe that the growth rate of output depends on the rate of accumulation of human capital and innovation, whose source is the stock of human capital, education level influence labor productivity. Investing in human capital for nigerias future english abstract. Nigeria capital market operation and economic growth. Indeed, spatial and temporal patterns of the demographic transition appear to be congruent with economic growth. Labor studies individuals differ in both inherited and acquired abilities, but only the latter differ among countries and time periods. Human capital and economic performance in the long run. The research analyses the role of human capital development on nigeria economic growth, the policies government has developed so far to improve human capital in nigeria, the reason why some failed and how all this play roles in driving the economic growth of the country. Investing in human capital for nigeria s future english abstract. The impact of human capital development on economic growth in nigeria. Nigeria the human capital index hci database provides data at the country level for each of the components of the human capital index as well as for the overall index, disaggregated by gender. A multivariate regression approach was employed to. It was set out to explore the relationship between human capital indices education and health and economic growth.
446 844 1079 1227 586 1096 1513 369 122 237 24 138 846 1324 25 476 409 1391 831 1517 960 1190 1055 545 656 95 992 1543 1127 1163 1181 1492 1464 1001 1438 1035 1118 113