IMPACT OF PUBLIC EDUCATION EXPENDITURE ON HUMAN CAPITAL DEVELOPMENT IN NIGERIA (1970-2015)

Abstract

The study empirically examines the impact of public education expenditure on Human Capital Development in Nigeria within a time frame of 46 years (1970-2015). Time-series data sourced from Central Bank of Nigeria and World Development Indices were used and analyzed using Auto Regressive Distributed Lag Model (ARDL) Approach. The results from the Unit Root tests indicate mixture of integration among the variables. ARDL co-integration Bound test suggests the presence of long-run relationship among all the variables. The results estimate on ARDL long-run estimate reveal that Enrolment (ENROL) Proxy for Human Capital Development is positively related to Government Capital Expenditure on Education (GCEE) in which a 1% change in GCEE leads to 0.02% change in Enrolment. While ENROL is negatively related to Government Recurrent Expenditure on Education (GREE) that is, 1% change in GREE will lead to 0.07% change in ENROL. The study also reveals a unidirectional causal relationship between GCEE and ENROL, and bidirectional relationship between Government recurrent expenditure on ICT (GREICT) and ENROL. The study recommends that careful scrutiny of public expenditures should be undertaken by making Education for all a priority through increased spending since adequate funding is necessary for operations and maintenance of education infrastructures.