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Causality between Human Resource Development and the Nigerian Economic Performance

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  • Olusanya, Oluwakorede

Abstract

This study provides an empirical insight into the relationship between human resource development through education and the Nigerian economic furtherance. In developed countries, the increased access to quality education especially the basic education on which an individual’s educational knowledge is premised is a fundamental goal of the government. However, in the Nigerian economy, uncertainty has clouded out the sector’s performance both in real and nominal terms. The study examined the causal relationship between human resource development proxied by total government expenditure on education and the Nigerian labour force on the Nigerian economic performance (GDP). The granger causality test was used in ascertaining the relationship that exist between the 4 variables selected for the model within the time period of 1981 to 2014. The ordinary least square technique was employed in estimating the equations and it was found that Human Resource Development proxied as Total Government Expenditure on Education had a negative effect on the Nigerian economic performance. The findings deduced from the error correction mechanism showed that 36% of the error in the long run relationship was corrected in one time period. The paper therefore concludes that Labour granger causes Total Government Expenditure on Education while Total Government Expenditure on Education does not granger cause the Labour force connoting a unidirectional relationship between the variables. Also on the economic performance, an independent relationship exists between the Total Government Expenditure on Education and the Real Gross Domestic Product meaning that the two variables in question do not granger cause each other which can therefore be inferred that human resource development and economic performance do not have statistically significant information to predict each other’s future values.

Suggested Citation

  • Olusanya, Oluwakorede, 2016. "Causality between Human Resource Development and the Nigerian Economic Performance," MPRA Paper 100854, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:100854
    as

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    References listed on IDEAS

    as
    1. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
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    3. Barro, Robert J & Lee, Jong-Wha, 2001. "International Data on Educational Attainment: Updates and Implications," Oxford Economic Papers, Oxford University Press, vol. 53(3), pages 541-563, July.
    4. N. Gregory Mankiw & David Romer & David Weil, 1990. "A Contribution to the Empirics of Economic Growth," Working Papers 1990-24, Brown University, Department of Economics.
    5. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
    6. N. Gregory Mankiw & David Romer & David N. Weil, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(2), pages 407-437.
    7. Granger, C. W. J., 1988. "Some recent development in a concept of causality," Journal of Econometrics, Elsevier, vol. 39(1-2), pages 199-211.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Growth; Human Resource Development; Human Capital; total government expenditure on education; Economic development.;
    All these keywords.

    JEL classification:

    • A22 - General Economics and Teaching - - Economic Education and Teaching of Economics - - - Undergraduate
    • I25 - Health, Education, and Welfare - - Education - - - Education and Economic Development
    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General

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