IS GOVERNMENT EDUCATION SPENDING BENEFICIAL TO HUMAN CAPITAL DEVELOPMENT? THE NIGERIAN EXPERIENCE

Abstract

Nigeria’s highest human development index rating is 0.539, indicating a low level of human capital development. Because of the need to improve the level of human capital development for better economic growth and development, this study investigates the impact of government education spending on human capital development in Nigeria for the period 2003q1 to 2021q4. Human capital development was proxied with the human development index, while the federal government's recurrent expenditure on education was used as a proxy for government education spending. A linear ARDL-bound test model was employed for the study. The unit root tests results show that all variables are integrated of order one. The cointegration test shows the presence of a long-run relationship between government education spending and human capital development. Government education spending has a positive and significant effect on human capital development in both the short and long run. Based on the findings, the study recommends increased government spending on education to increase human capital development to a level that will adequately enhance the growth and development of the Nigerian economy.