Does Human Capital Investment Matter in Economic Development? Evidence from a Nigerian Micro-data

Abstract

In this paper, I establish the relationship between human capital investment and economic development in Nigeria using a micro-data. Previous studies on Nigeria have exploited the macro data and findings are inconclusive. These studies proxied educational quality by enrolment in learning institutions. Instead, I utilized educational attainment which is a better measure of educational output.  The results reveal that all the human capital indicators adopted in the study with the exception of primary school attainment positively drive economic development in Nigeria. The disconnection between economic development and primary education may be traced to the low skill acquired at this level. I observe that the positive link between secondary, tertiary, and economic development is weaker when compared to macro-studies which used enrolment rate rather than educational attainment. This suggests that these studies may have over-estimated the effect of human capital investment, particularly education on economic development in Nigeria. This finding therefore could redirect government policies towards focusing more on educational attainment as the outcome of educational input.