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AN ANALYSIS OF HUMAN CAPITAL DEVELOPMENT AND PRODUCTIVITY GROWTH-CASE STUDY, NIGERIA Adejumo Oluwabunmi Opeyemi, Adejumo Akintoye Victor AN ANALYSIS OF HUMAN CAPITAL DEVELOPMENT AND PRODUCTIVITY GROWTH-CASE STUDY, NIGERIA
Abstract and Figures
In order to address the direction of causality between human capital and productivity growth in Nigeria, the study first investigated the pattern of productivity growth in Nigeria between 1970 and 2010. Following the endogenous growth model, which argued that technical progress, through an effective labor force, could lead to long-run growth which can be determined from within an economy; but it actually depends on the efficiency with which resources available to such an economy are utilized. This is against the exogenous growth model which emphasized that long-run growth can be attained by some unexplained technological progress, which is exogenous to any economy. Based on this controversy in literature, this study empirically determined the productivity growth in Nigeria, as well as the causal relation between human capital development and productivity growth in Nigeria using the Engle-Granger causality test. The results revealed that productivity growth has been very low and unstable in Nigeria as it oscillated between -1.5% and 0.6%. In addition, the nexus between human capital and productivity growth was examined. The findings revealed that while productivity growth caused human capital development, human capital development did not cause productivity growth.
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Purpose The study examines the dynamic interrelationships among the school enrolment rates and the rate of employment (via unemployment rates) in Nigeria. Design/methodology/approach The study employed Autoregressive estimates and an unrestricted VAR approach to analyze these relationships. Findings The study lends credence to the new-growth theory (i.e. endogenous models) that more investments in human capital, through education especially at higher levels, will allow human capital to evolve dynamically to increase long-run growth positively in Nigeria. This tendency engenders multiplier effects in stimulating sustainable human capital development given that education-driven growth facilitates employment in the short-run. However, to sufficiently sustain human capital development to generate employment in the long-run, it appears there is need to combine education with other cooperant factors such as social safety nets, good governance, private sector development and efficient utilization of human and physical resources. Originality/value The growth literature has been definitive on the role of human capital in achieving long-run economic growth. Therefore, investments in education have been identified as a vital channel for building human capital and achieving long run development objectives. Thus, in the nascent quest for sustainable development, this study takes the new growth theory a step higher by examining the modulating effects of education-driven growth (i.e. via school enrolments rates) in setting the pace for employment patterns in Nigeria.
Human capital and human capital development have been used interchangeable in the growth literature to achieve sustainable economic growth in the developing economies. While the expansion in educational enrolment rate has not guaranteed a long-run growth in developing economies, the question remains is there any missing link in the nexus between human capital development and economic growth in developing economies? Using the income measurement approach, the study examined the nexus and causality between human capital development and economic growth in the long run economic growth in Nigeria. This study found that human capital development, curriculum development, inflation rate and GINI index were the missing link variables in achieving long run economic growth within 1985-2016 in Nigeria. Also, the study found bidirectional causality between human capital development and economic growth using income measurement approach. Therefore, the identified missing link variables in the nexus between human capital development (HCD) and economic growth in Nigeria should guide policymakers and the academic to achieve sustainable economic growth in the developing economies.
This paper examines the levels, composition and adequacy of public expenditures and ascertains if they are responsible for the poor state of human resources development in Nigeria. The country is one of those with the lowest human development index in the world, which is a matter of serious concern. Using descriptive method, this study finds that external debt service and defense takes a high proportion of federal government expenditure and GDP, while social spending accounts for the least. Education and health expenditures have faced lesser cuts than external debt service and and defense, but allocations to education and health sectors are inadequate when related to the benchmarks and the performance of other countries. The underfunding of education and health sectors has resulted in low literacy rate low life expectancy with marginal improvements in primary and secondary school, high level of malnutrition, and deteriorating pupil teacher ratio. The paper recommends that more expenditure be allocated to the education and health sectors to meet international standards and requirements for economic growth and human development . Emphasis should be paid to primary and secondary education and preventive health because of their welfare enhancing effect on the majority of the people.
One of the key macroeconomic objectives of most countries is attaining sustainable economic growth which needs to be achieved through enhancing productivity. According to the Iranian 4th Five -Year -Plan, 31.3 percent of GDP growth is projected to be financed through enhancement of productivity. This study presents a model capturing sources of total factor productivity using annual time series data from 1974 to 2007. Total factor productivity in this model is determined by labor and capital stock. This paper attempts to estimate the total factor productivity and show its share on economic growth in the economy of Iran. The findings show that productivity growth of each production factor directly affects internal grass production positively. Empirical estimates indicate that the share of productivity growth of production factors has been reduced from 9.5 percent at the beginning of period (1974) to 5.3 percent at the end of period (2007).
Development studies textbooks and courses have sometimes tended to avoid significant economic content. However, without an understanding of the economic aspects of international development many of the more complex issues cannot be fully comprehended. Economics and Development Studies makes the economic dimension of discourse around controversial issues in international development accessible to second and third year undergraduate students working towards degrees in development studies. Following an introductory chapter outlining the connections between development economics and development studies, this book consists of eight substantive chapters dealing with the nature of development economics, economic growth and structural change, economic growth and developing countries, economic growth and economic development since 1960, the global economy and the Third World, developing countries and international trade, economics and development policy, and poverty, equality and development economists, with a tenth concluding chapter. This book synthesizes existing development economics literature in order to identify the salient issues and controversies and make them accessible and understandable. The concern is to distinguish differences within the economics profession, and between economists and non-economists, so that the reader can make informed judgments about the sources of these differences, and about their impact on policy analysis and policy advice. The book features explanatory text boxes, tables and diagrams, suggestions for further reading, and a listing of the economic concepts used in the chapters. © 2010 Michael Tribe, Frederick Nixson and Andy Sumner. All rights reserved.
The study analyses the export and productivity grow th in the Nigerian manufacturing sector. Export growth is regressed on total factor productivity growth. The Error Correction Model was used on data collected from publications of the Central Bank of Nigeria. Import growth rate, growth rate of fore ign income, relative income and capacity utilization are used as control variables. The empirical analysis results provide support for a link between export growth an d productivity growth. The direction of causality runs in both directions. It is important to promote manufacturing export at a sustainable level, not just over space and time. This study investigates the link between trade and productivity growth for the Nigerian economy, with special attention to export-productivity nexus in t he manufacturing sector. Our attention to this sect or is borne out of the existing gap in the literature of trade-productivity nexus in Nigeria. Most previous studies analyzing the relationship between trade and growth for the Nigerian economy have focused on total or non-oil export as trade and investigated the causal ity between export and economic growth. The causality between trade and export in manufacturing sectors h as largely been ignored in the literature. This omi ssion is rather surprising given the fact that economies that are breaking forth in the global market rely m ore on manufactured exports, which has termed manufacturing sector 'the most imperative' in the global market . This study tries to provide a comprehensive analysi s of export trade and productivity growth in the manufacturing sector, with special emphasis on the productivity led-export growth, and other factors driving the relationship. Nigeria is highly depende nt on external trade, yet there have not been enoug h evidences of improved productivity growth, especial ly in the manufacturing sectors. The question now is, if increased productivity gro wth increases export growth as in the case of some developing economies, or it is export that increas e productivity as found out in the newly industrial ised economies, what can be said of the Nigerian economy? This question is necessary following the need to know the policy target between the two variables. T hus, some fundamental questions, which form the basis of this paper are: (i) What are the levels of total factor productivity in manufacturing industries in Nigeria?
Economic development is accompanied with changes in the inter‐sectoral flows of intermediate goods. This structural change assumes certain patterns depending on the stage and nature of development of the economy. This paper examines such possible patterns and their implications on the basis of input‐output analysis for the USA, Japan and India and suggests that the form of interaction between sectors is unilateral—the matrix is either lower or upper triangular signifying the structure of the economy. It also measures the extent of structural change of the three countries and considers the employment implications of such change.