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Fiscal Stimulus and Human Capital in Nigeria: A Bayesian VAR Analysis

Author

Listed:
  • Evans, Olaniyi

Abstract

This study investigates the relationship between fiscal stimulus and human capital in Nigeria between 1981-2015 using Bayesian estimation (BVAR model) with a KoKo Minnesota/Litterman prior distribution. Fiscal stimulus is proxied by education expenditure and human capital by school enrolment rates. The findings show that higher fiscal stimulus is associated with higher levels of human capital in Nigeria. It is, however, interesting to note that fiscal stimulus is having an insignificant positive impact on human capital. Education expenditure in the country is not robust enough to support the necessary quanta of human capital with its puny investment in education. It is, therefore, imperative for Nigeria to adopt a strategy which promotes provision of adequate funds for human capital development.

Suggested Citation

  • Evans, Olaniyi, 2025. "Fiscal Stimulus and Human Capital in Nigeria: A Bayesian VAR Analysis," MPRA Paper 123997, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:123997
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    References listed on IDEAS

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    1. Koop, Gary & Korobilis, Dimitris, 2010. "Bayesian Multivariate Time Series Methods for Empirical Macroeconomics," Foundations and Trends(R) in Econometrics, now publishers, vol. 3(4), pages 267-358, July.
    2. Alonso-Carrera, Jaime & Freire-Seren, Maria Jesus, 2004. "Multiple equilibria, fiscal policy, and human capital accumulation," Journal of Economic Dynamics and Control, Elsevier, vol. 28(4), pages 841-856, January.
    3. Sims, Christopher A & Stock, James H & Watson, Mark W, 1990. "Inference in Linear Time Series Models with Some Unit Roots," Econometrica, Econometric Society, vol. 58(1), pages 113-144, January.
    4. Yoram Ben-Porath, 1967. "The Production of Human Capital and the Life Cycle of Earnings," Journal of Political Economy, University of Chicago Press, vol. 75(4), pages 352-352.
    5. Ortigueira, Salvador, 1998. "Fiscal policy in an endogenous growth model with human capital accumulation," Journal of Monetary Economics, Elsevier, vol. 42(2), pages 323-355, July.
    Full references (including those not matched with items on IDEAS)

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    Keywords

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    JEL classification:

    • I25 - Health, Education, and Welfare - - Education - - - Education and Economic Development
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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