Impact of Human Capital Development on Economic Growth in Nigeria: Using ARDL Bound Approach

This study examined the impact of human capital development on economic growth in Nigeria, were education and health expenditures was proxed for human capital. Secondary data between 1986 and 2017 were collected. Autoregressive Distributed Lagged (ARDL) bound technique was used to analyse the data. The result on education expenditure revealed that both capital and recurrent expenditure has positive and significant impact on economic growth by 2% and 1% during the period of the study. On the other hand, result on capital expenditure on health shows positive and significant impact at 1% level on economic growth with impact elasticity 3%. Life expectancy rate result shows positive with impact elasticity 23%, but the probability value indicated that there is no significant impact on economic growth during the period of the study. The bound test cointegration procedure revealed that there is presence of long-run relationship among the variables employed. The coefficients of the ECM (-2.45) and (-1.32) shows a highly statistically significant, implies the disequilibrium occur due to some shocks which is totally corrected approximately 25% and 13% respectively in current year. The study recommends that policy makers should review budget allocation to education and health sectors upward in other to meet up with United Nations and African Union benchmark of 26% and 15% respectively.