Journal of World Economic Research

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Empirical Analysis of Determinants of Human Capital Formation: Evidence from the Nigerian Data

Received: 07 June 2018    Accepted: 27 June 2018    Published: 23 July 2018
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Abstract

The study examined the determinants of human capital formation with evidence from Nigeria. Specifically, the study sought to examine how these determinants affect human capital formation; and how they affect the growth of the Nigerian economy. The theoretical foundations of the study were the views of Adam Smith, Theodore Schultz, Gary Becker and Jacob Mincer on human capital. The data used in the study were expenditures on education, expenditures on health, total enrolments (primary, secondary, and tertiary), mortality rate, life expectancy and GDP of Nigeria. The study used trend diagrams, tabular analysis and descriptive statistics to provide answers to the first question; and the second question was answered using the three-stage least squares (3SLS) econometric technique. It was discovered that bi-directional positive and significant relationships existed between health expenditures and economic growth. Mortality rate had a positive relationship with expenditures on health. Also, bi-directional negative and significant relationships existed between education expenditures and economic growth, even when there were increased expenditures on education over the years. Total enrolments positively affected education expenditures. It was concluded that expenditures on education had not been sufficient in revitalizing the education sector. This has resulted to negative consequences in determining effective and efficient human capital formation in the economy. It was recommended that expenditures on health should be increased to ensure positive contributions to human capital formation; and government should focus on revitalizing the education sector, through effective and transparent spending, so as to have positive effects on human capital formation and the economy.

DOI 10.11648/j.jwer.20180702.14
Published in Journal of World Economic Research (Volume 7, Issue 2, June 2018)
Page(s) 73-81
Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2024. Published by Science Publishing Group

Keywords

Human Capital, Education, Health, Enrolments, Mortality, 3SLS

References
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[2] Anyanwu, S. O., Adam, J. A., Obi, B., and Yelwa, M. (2015). Human Capital Development and Economic Growth in Nigeria. Journal of Economics and Sustainable Development, 6(14).
[3] Babalola, J. B. (2000). Educational Cost and financing Analysis. Ibadan: External studies progamme, University of Ibadan.
[4] Becker, G. S. (2007). Health as human capital: synthesis and extensions. Oxford Economic Papers, 59(3), 379-410.
[5] Chete, O. and Adeoye, A. (2002). Human Capital and Economic Growth: The Nigeria Evidence Human Resource Development in Africa. Nigerian Economic Society Annual Conference of the Nigerian Economic Society, pp.79-101.
[6] Dauda, R. O. (2010). Role of Human Capital in Economic Development: An Empirical Study of Nigerian Case. Oxford: Oxford Business and Economics Conference Program.
[7] De la Fuente, A. and Ciccone, A. (2002). Le capital humaindansunee’conomiemondialesur la connaissance. Rapport pour la Commission Europe enne, Brussels.
[8] Eigbiremolen, G. O., and Anuadaka, U. S. (2014) Human Capital Development and Economic Growth: The Nigeria Experience International Journal of Academic Research in Business and Social Sciences, Vol. 2
[9] Ejere, S.I. (2011). Human Capital Formation as Catalyst for National Development: Nigeria in Perspective. International Business and Management, 2(2), 98-104.
[10] Gujarati, D. N., and Sangeetha (2007). Basic Econometrics. 4th ed., New Delhi: Tata McGraw–Hill Publishing Company Ltd.
[11] Isola, W. A. and Alani, R. A. (2012). Human Capital Development and Economic Growth: Empirical Evidence from Nigeria. Asian Economic and Financial Review, 2(7), 813-827.
[12] Jaiyeoba, S. V. (2015). Human Capital Investment and Economic Growth in Nigeria. African Research Review, An International Multidisciplinary Journal, 9(1), No.36.
[13] Johnson, A. O. (2011). Human Capital Development and Economic Growth in Nigeria. European Journal of Business and Management, 3(9), 29-38.
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[16] Matthew, A. O., Ogunnaike, O. O. and Fasina, F. F. (2008): Human Capital Investment: Effects on Economic Growth in Nigeria (1970-2004). Labour Law Review, 2(1), pp.111-125.
[17] Mincer, J. (1958). Investment in Human Capital and Personal Income Distribution. Journal of Political Economy, 66(4), p. 281-302.
[18] Nelson, R. R. and Edmund S. P. (1966). Investment in Humans, Technological Diffusion, and Economic Growth. American Economic Re-view, (56) 69-75
[19] Osoba, A. M. and Tella, S. A. (2017). Human Capital Variables and Economic Growth in Nigeria: An Interactive Effect. Euro Economica, 36(1).
[20] Prada (2009). Measuring Human Capital Returns. The Journal of Political Economy, 79(6), 195-121.
[21] Romer, P. (1990). Endogenous Technological Change. Journal of Political Economy 98, S71-S102.
[22] Paul, A. A. and Akindele, J. O. (2016). The impact of Human Capital Development on Economic Growth in Nigeria: ARDL Approach. IOSR Journal of Humanities and Social Science, 21(3), 1 – 7.
[23] Sanyaolu, O. A., Ogunleye, O. O., Owolabi, O. A. and Lawal, O. O. (2017). Human Capital Development and Economic Growth in Nigeria. Journal of Business Management, 3(8), 17 – 37.
[24] Schultz, T. W. (1961). Investment in Human Capital. American Economic Review, 51, 117.
[25] Sieng, L. W.and I. Yussof (2014) Human Capital Accumulation and Economic Growth in Malaysia – Investigating the Long Run Nexus. Malaysian Journal of Economics 48(1), 155 – 165.
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Author Information
  • Department of Economics, Faculty of Social Sciences, University of Uyo, Uyo, Nigeria

  • Department of Economics, Faculty of Social Sciences, University of Port Harcourt, Choba, Nigeria

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  • APA Style

    Ubi-Abai Itoro Praise, Chioma Chidinma George-Anokwuru. (2018). Empirical Analysis of Determinants of Human Capital Formation: Evidence from the Nigerian Data. Journal of World Economic Research, 7(2), 73-81. https://doi.org/10.11648/j.jwer.20180702.14

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    ACS Style

    Ubi-Abai Itoro Praise; Chioma Chidinma George-Anokwuru. Empirical Analysis of Determinants of Human Capital Formation: Evidence from the Nigerian Data. J. World Econ. Res. 2018, 7(2), 73-81. doi: 10.11648/j.jwer.20180702.14

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    AMA Style

    Ubi-Abai Itoro Praise, Chioma Chidinma George-Anokwuru. Empirical Analysis of Determinants of Human Capital Formation: Evidence from the Nigerian Data. J World Econ Res. 2018;7(2):73-81. doi: 10.11648/j.jwer.20180702.14

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  • @article{10.11648/j.jwer.20180702.14,
      author = {Ubi-Abai Itoro Praise and Chioma Chidinma George-Anokwuru},
      title = {Empirical Analysis of Determinants of Human Capital Formation: Evidence from the Nigerian Data},
      journal = {Journal of World Economic Research},
      volume = {7},
      number = {2},
      pages = {73-81},
      doi = {10.11648/j.jwer.20180702.14},
      url = {https://doi.org/10.11648/j.jwer.20180702.14},
      eprint = {https://download.sciencepg.com/pdf/10.11648.j.jwer.20180702.14},
      abstract = {The study examined the determinants of human capital formation with evidence from Nigeria. Specifically, the study sought to examine how these determinants affect human capital formation; and how they affect the growth of the Nigerian economy. The theoretical foundations of the study were the views of Adam Smith, Theodore Schultz, Gary Becker and Jacob Mincer on human capital. The data used in the study were expenditures on education, expenditures on health, total enrolments (primary, secondary, and tertiary), mortality rate, life expectancy and GDP of Nigeria. The study used trend diagrams, tabular analysis and descriptive statistics to provide answers to the first question; and the second question was answered using the three-stage least squares (3SLS) econometric technique. It was discovered that bi-directional positive and significant relationships existed between health expenditures and economic growth. Mortality rate had a positive relationship with expenditures on health. Also, bi-directional negative and significant relationships existed between education expenditures and economic growth, even when there were increased expenditures on education over the years. Total enrolments positively affected education expenditures. It was concluded that expenditures on education had not been sufficient in revitalizing the education sector. This has resulted to negative consequences in determining effective and efficient human capital formation in the economy. It was recommended that expenditures on health should be increased to ensure positive contributions to human capital formation; and government should focus on revitalizing the education sector, through effective and transparent spending, so as to have positive effects on human capital formation and the economy.},
     year = {2018}
    }
    

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    T1  - Empirical Analysis of Determinants of Human Capital Formation: Evidence from the Nigerian Data
    AU  - Ubi-Abai Itoro Praise
    AU  - Chioma Chidinma George-Anokwuru
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    DO  - 10.11648/j.jwer.20180702.14
    T2  - Journal of World Economic Research
    JF  - Journal of World Economic Research
    JO  - Journal of World Economic Research
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    PB  - Science Publishing Group
    SN  - 2328-7748
    UR  - https://doi.org/10.11648/j.jwer.20180702.14
    AB  - The study examined the determinants of human capital formation with evidence from Nigeria. Specifically, the study sought to examine how these determinants affect human capital formation; and how they affect the growth of the Nigerian economy. The theoretical foundations of the study were the views of Adam Smith, Theodore Schultz, Gary Becker and Jacob Mincer on human capital. The data used in the study were expenditures on education, expenditures on health, total enrolments (primary, secondary, and tertiary), mortality rate, life expectancy and GDP of Nigeria. The study used trend diagrams, tabular analysis and descriptive statistics to provide answers to the first question; and the second question was answered using the three-stage least squares (3SLS) econometric technique. It was discovered that bi-directional positive and significant relationships existed between health expenditures and economic growth. Mortality rate had a positive relationship with expenditures on health. Also, bi-directional negative and significant relationships existed between education expenditures and economic growth, even when there were increased expenditures on education over the years. Total enrolments positively affected education expenditures. It was concluded that expenditures on education had not been sufficient in revitalizing the education sector. This has resulted to negative consequences in determining effective and efficient human capital formation in the economy. It was recommended that expenditures on health should be increased to ensure positive contributions to human capital formation; and government should focus on revitalizing the education sector, through effective and transparent spending, so as to have positive effects on human capital formation and the economy.
    VL  - 7
    IS  - 2
    ER  - 

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