Human Capital Development and Poverty Reduction in Nigeria

This paper analyzed the link between human capital development and poverty reduction in Nigeria between 1990 and 2016. In specific terms, the effects of primary and secondary schools enrolments, as well as public and private healthcare expenditures on poverty level, were examined. The data required for the analysis were culled from the National Bureau of Statistics and World Bank World Development Indicators. Fully Modified Least Squares and Granger causality test in addition to ADF unit root and Johansen-Juselius cointegration tests were employed as data analysis techniques. It is evident from the unit test result that the variables are mixed integrated with the order of integration ranging from zero to one. The trace and Max-Eigen statistics for cointegration tests indicate that two cointegrating equations exist in the model. The implication of this finding is that underlying measures of human capital development and poverty level have long run relationship. The cointegrating regression result shows that primary school enrolments, secondary school enrolments, and public healthcare expenditure are significantly related to poverty level while private healthcare spending does not exert significant influence on poverty level. A percentage increase in primary school enrolment reduces poverty by 0.697 percent while a percentage increase in secondary school enrolment contracts poverty by 0.84 percent. Similarly, a percentage increase in public healthcare spending, on the average, reduces poverty by 16.63 percent. This is indicative that public sector spending in the health sector is robust in reducing the level and depth of poverty in Nigeria. The Granger causality test results also show that joint causality runs from the explanatory variables to the poverty level. Given this finding, it is recommended among others that Policymakers should ensure that poverty reduction strategy in Nigeria provides for increased access to education through gross primary and secondary school enrolments and public healthcare