GOVERNMENT EDUCATION EXPENDITURE AND HUMAN CAPITAL DEVELOPMENT IN NIGERIA: AN EMPIRICAL INVESTIGATION

Abstract

A nation’s human capital captures all obtainable expertise, resource knowledge, work proficiency and quality of labour possessed by her citizen through education. Studies on the impact of human capital development on economic growth have been performed in the past with only few considering the state of education as a factor of human capital development. The effect of government education expenditure on human capital development in Nigeria was investigated in this study. The research employed secondary data from 1990 to 2020. The dependent variable in the analysis was gross secondary school enrolment rate, the independent variables were recurrent and capital expenditure on education, and the control variable was recurrent expenditure on health. The stationarity of the variables was tested using the Augmented Dickey-Fuller (ADF) test, and the variables were found to be stationary at various levels. The Autoregressive Distributed Lag Model (ARDL) was adopted to estimate the model. The result of the estimated model showed that recurrent expenditure on education and capital expenditure on education had negative insignificant effects on gross secondary school enrolment rate while recurrent expenditure on health had a positive but insignificant effect. However, the independent variables had joint effects on the dependent variable. The study recommended the implementation of education spending policies with the focus on filling the gaps the education sector has in affecting human capital development in Nigeria significantly. Policy makers should also strive in formulating policies to boost institutional capacities to increase enrolment in schools and improve the provision of healthcare services.