Human Capital Development and Labour Market Outcomes in Nigeria, 1980-2025

Abstract

The research investigated the relationship between human capital development and labour market outcomes in Nigeria during the period 1980-2025. Public education and public health expenditures; gross school enrolment and human capital index served as explanatory variables, whilst the dependent variables were labour force participation rate and unemployment rate. Auto Regressive Distributed Lag (ARDL) was used to analyze the data. The findings revealed that the relationship between labour force participation rate and public education and gross school enrolment was positive and significant at long-run level, whereas the relationship between public health and the former was significant and negative. The relationship between human capital index and labour force participation was not significant. The analysis further revealed that the short run impact of public education and public health expenditure was positive and significant as well as significant and negative, respectively. No significant effect was detected from gross school enrolment and human capital index on the dependent variable. The study concludes that human capital development plays a significant role on labour market outcomes in Nigeria, the extent of which depends on the specific indicators of human capital development. The study recommends that government should improve the efficiency of its spending in both education and health; enhance school to workplace transition programmes through skill development training and work experience programmes; augment the contribution of human capital through job creation policies that promote industrialization, enhance private sector participation and entrepreneurship.