Government expenditure and human capital development in Nigeria: an auto-regressive distributed lagged model approach (ARDL)

The concept of human capital refers to the abilities and skills of human resources of a country, while human capital development refers to the process of acquiring and increasing the number of persons who have the skills, education and experience that are critical for economic growth. This study empirically studied the relationship between human capital development and government expenditure. Data were collected over the period 1990-2014. ARDL and impulse response function were adopted for the estimation. The Bound Test was used to determine that a long run relationship exists between HDI and GOVEXP. The results demonstrated that both in the long and short run, government spending has remained positive but to a very large extent insignificant to human capital development in Nigeria. This is why Nigeria's per capita income has remained low for a long time in the world ranking. This study therefore strongly recommends that government spending should largely be focused on human development through specialized high technology-driven schools and efficient and effective health facilities.