HUMAN CAPITAL DEVELOPMENT AND ECONOMIC GROWTH: EVIDENCE FROM NIGERIA.
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HUMAN CAPITAL DEVELOPMENT AND ECONOMIC GROWTH: EVIDENCE FROM NIGERIA.
Chapter one
INTRODUCTION
In global words, knowledge of all aspects of human endeavour, whether engineering, business, medical, and so on, is the pivot around which the fulcrum of wisdom revolves. This explains the disparities in development between individual and national lives around the world.
No country has achieved long-term economic growth without making significant investments in human capital. Several research have been conducted to investigate the channels via which human capital can influence growth (Barro et al, 1995; Temple, 1990).
However, human capital development has been described as a development goal. It is a method of realising people’s potential by expanding their capabilities, which inevitably entails empowerment, allowing them to actively participate in their own development.
Human capital is also a means since it improves people’s abilities, knowledge, productivity, and intensiveness through a broadly defined process of human capital development.
Thus, human capital development is a people-centered strategy rather than a goods-centered or production-centered strategy for development. What actually important is the ability of people to establish their own goals and implement programmes and projects that directly benefit them.
The impact of social spending on economic growth is becoming more prominent in the literature. It is becoming increasingly vital to explore the impact of a strong public health system and quantitative education on global economic growth.
Productivity has always been related to high-quality health care and education. Basic education is essential for participation and productivity in economic life. A healthy work force boosts both the quantity of growth achieved by creating a favourable investment climate and the poverty-reduction effects of that growth.
This educational example demonstrates how the two pillars of investment climate and development are inextricably linked and mutually beneficial.
According to Todaro (2000), education serves the dual function of empowering people and promoting economic progress. In the first place, education makes people more aware of their responsibilities and their fundamental and qualified rights. It provides an opportunity to learn how to do things better.
This, in turn, raises not only individual income but also national income, because the goal of economic growth is to improve people’s lives. However, this does not imply that education supply is superior; rather, societies must carefully consider the form and allocation of education provision in relation to the requirements and aspirations of the society.
Education promotes information and skills that increase productivity, but it can also perpetuate social disparities, damage values, and foster attitudes and aspirations that are detrimental to progress.
Government spending is mostly directed towards education, hospitals, and higher institutions, among others. Improvements could include raising people’s incomes so they can afford better health care or enhancing health-care facilities.
Increasing people’s incomes so that they can afford for themselves decent health care has been shown to be extremely beneficial to the people of third-world nations such as Nigeria. It has the ability to boost the nation’s income.
1.1 Statement of the Study
Human capital development has been a major role in economic growth and development in every country on the planet, and it is well understood that a country cannot experience considerable economic progress unless it has appropriate human capital.
Historically, much of Nigerian planning was focused on the acquisition of physical capital for quick expansion and development, with little understanding of the critical role played by the human capital development process.
In truth, people are a country’s most important asset, and a flawed incentive system can lead to the waste of human resources through human capital formation.
1.2 Objectives of the Study
Given Nigeria’s current manpower condition, the study’s broad purpose is to investigate the influence of human capital development on economic growth. It specifically aims at:
1. Investigating the impact of capital formation on the country’s GDP.
2 Investigating the impact of student enrollment on economic growth.
3. Calculating the impact of current education spending on the actual GDP growth rate.
1.2 Justifications for the Study
Education and training have a significant role in increasing workers’ human capital, which includes knowledge and skills that contribute to GDP in Nigeria.
However, worker productivity gains account for around two-thirds of all real GDP growth. If the policy alternatives resulting from this analysis are implemented, Nigeria’s growth will be primarily driven by improved technology, more capital, increased education and training, economies of scale, and better resource allocation.
More importantly, technical improvement is a critical driver of productivity growth, accounting for the increase in output growth in Nigeria. Generally, technical growth is driven by the discovery of new information, which allows resources to be integrated in more efficient ways.
1.4 Scope of the Study
The study spans the years 1977-2006. The period corresponds with the oil boom era.
Pre-SAP, SAP, and post-SAP eras, as well as periods of globalisation and economic reform.
1.15 Source of Data and Method of Analysis
This study uses secondary data. It was mostly based on the Central Bank of Nigeria’s (CBN) statistical bulletin and Annual Economic and Financial Report, as well as the Federal Republic of Nigeria’s educational curriculum. The study’s analytical method is multivariate cointegration.
The research is divided into five chapters: the introduction, the literature review, the structural background and methodology, the presentation, analysis, and interpretation of the results, and the summary of findings, conclusion, and recommendations.
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