Human Capital Investment and Economic Development: The Nigerian Experience

Abstract

The study examined theimpact of human capital investment on economic development of Nigeria. TheSolow augmented model developed by Mankiw, Romer, and Weil (1992) whichincorporated the role of human capital as a yardstick for economic developmentwas adapted  to investigate the linkbetween human capital investment and economic development in Nigeria. Annualtime series data sourced from the Central Bank of Nigeria’s StatisticalBulletin between 1970 to 2011. Ordinary least square method (OLS), Augmenteddickey fuller test (ADF), Johansen co-integration, Error Correction Model (ECM)were employed as estimation techniques. Pre-estimation findings showed that allvariables are non-mean reverting at level and do not converge to their long runequilibrium until they were at first differenced. The empirical findingindicated that there was a negative short run relationship between economicdevelopment and human capital investment in Nigeria. It is recommended thatNigeria should consider education beyond secondary school enrollment, ifinvestment in human capital is to produce meaningful macroeconomic changes.