EMPIRICAL ANALYSIS OF HUMAN CAPITAL DEVELOPMENT AND ECONOMIC GROWTH IN NIGERIA: EVIDENCE FROM AUTOREGRESSIVE DISTRIBUTED LAG (ARDL)

Abstract

The paradox in Nigeria’s development trajectory, despite its abundant youthful population and 
natural resources, has given rise to an empirical study of human capital development and its 
impact on Nigeria’s economic growth. The autoregressive distributed lag (ARDL) estimation 
technique was employed, with human capital index (HCI), government expenditure on 
education (GEE), and labour force participation (LFP) as core explanatory variables, and real 
gross domestic product (RGDP) as the control variable. Data were drawn from the Central 
Bank of Nigeria Statistical Bulletins 2024, National Bureau of Statistics, World Bank 
Development Indicators 2024 and International Labour Organisation annual data 2024. The 
result of the study indicated that human capital index has statistically significant positive 
impact on economic growth in the short run but a negative impact in the long-run. Government 
expenditure on education and labour force participation has statistically positive impact in both 
the short and long run. Therefore, the study concluded that structural weaknesses and 
insufficient long-term human capital development are the bane of economic growth in Nigeria 
and recommends a comprehensive restructuring of education to enhance efficiency, a better 
reward system for skilled human capital, the promotion of active labour market participation 
and strengthening the productivity of human capital. These measures are essential if long term 
contribution of human capital to economic growth in Nigeria can be sustained.