Title Page                                                                                        i

Certification                                                                                     ii

Approval Page                                                                                iii

Dedication                                                                                                 iv

Acknowledgements                                                                        v

Abstract                                                                                           vi

Table of Content                                                                                      vii



  • Background to the Study 1
  • Statement of the Problem 4
  • Research Questions 5
  • Research Objectives 5
  • Research Hypotheses 6
  • Significance of the Study 6
  • Organization of the Study 7



2.1 Theoretical Literature Review                                                 8

2.1.1 Conceptual Issues                                                                8

2.1.2 Basic Theories                                                                      14

2.2 Empirical Literature Review                                                    27

2.3 Summary of Literature Review                                                         34

2.4 Justification of the Study                                                                   35



3.1 Theoretic Framework                                                               37

3.2 Model Specification                                                                 38

3.3 Estimates Techniques and Procedure                                  39

3.4 Evaluation of Estimates                                                                    40

3.5 Test of Restatement of Hypothesis                                                 45

3.6 Nature and Sources of Data                                                   46




4.1 Result Presentation                                                                 47

4.2 Interpretation of Results                                                          47

4.3 Evaluation of Results                                                               48

4.3Test of Hypotheses                                                                            55



5.1 Summary of Findings                                                              56

5.2 Conclusion                                                                                57

5.3 Recommendation                                                                     59












This study examines the human capital development and economic growth in Nigeria. The objective of the study was to examine the structure of human capital development in national economic trend. To achieve this objective, relevant secondary data from the period of 2000-2016. The data collected for the study  were analyzed using the ordinary least square (OLS) method of regression using SPSS to explore the relationship between the GDP (the dependent variable) and the PIT, TTR and TGOvExp (the independent variables) head over the period, which where considered as the model. The result shows that there is a significant positively relationship between the dependent variable (GDP) and the independent variable (PIT, TTR, GovExp). The model indicates that the variables as a group explains economic growth and development of Nigeria. It was gathered that personal income tax is generally effective in the growth and development of Nigeria as it is one of the source of revenue to the federal, state and local government. It is recommended that human capital should be established by the federal state and local government with the aim of identifying all possible source.








1.1 Background of the Study

The major source of per capital output in any country; whether developing or developed, with a market economy or centrally planned is an increase in productivity. Per capita output growth is however an important component of economic welfare, (Abramowitz, 2001). From experience, it has been revealed that human beings are the most important and promising source of growth in productivity and economic growth. Equipment and technology are products of human minds and can only be made productive by people. The success of any productive program depends on human innovative ideas and creativity. The impact of human capital development and economic growth in recent times emphasized the growth theory (Romer, 2006; Lucas, 2008). An interesting idea in their work was that in the long run, output per unit of input could increase even when inputs were exhaustively accounted for.

Technically advanced human capital and a growing knowledge base appear to be part of this wellspring of growth. An implication of Lucas’ hypothesis on human capital is thus associated with investment in man and his development as creative and productive resources (Harbison, 2002).

As the global economy shifts towards more knowledge-based sectors (e.g. the manufacture of ICT devices, pharmaceuticals, telecommunications and other ICT based services, R&D), skills and human capital development becomes a central issue for policy makers and practitioners engaged in economic development both at the national and regional level (OECD,2006); yet the impact education and vocational training activities exert upon changing national and regional economies remain less than thoroughly explained and analyzed. Since the introduction of human capital theory in the 1960s, a number of studies have attempted to address this and related issues. Today, the global economy is divided into two parts comprising of a few rich nations regarded as the developed countries (DCs) and many poor nations regarded as the less developed countries (LDCs). DCs are characterized by high productivity while the LDCs are characterized by low productivity. According to the level of human capital development and per capita income, Nigeria is classified under the LDCs.

Nigeria as a country is immensely endowed both in natural and human resources. The pool of resources from one end to the other is unquantifiable to such extent that, given a dynamic leadership, economic prosperity would have been achieved in late 20th century. The primary focus of Nigeria has been finding a way to accelerate the growth rate of national income and to engage in structural transformation of her subsistence and resource based economy to a production and consumption based economy in order to break the cycle of poverty, low productivity and stagnation.

In spite of all these abundant resources, Nigeria has failed to realize her full development potential with the topmost priority currently given to sustainable human capital development or people oriented development by many countries and multilateral organizations, e.g. UNDP. A review of the Nigerian economy has become quite appropriate as a way of understanding more comprehensively her human capital development.

Human capital refers to the abilities and skills of human resources and human capital development refers to the process of acquiring and increasing the number of persons who have the skills, education and experience which are critical for the economic growth of the country (Harbison, 2002). Therefore, what really matters in Nigeria are the empowerment of people and the mobilization of economic surplus into productive investment channels. There is also the need for the Nigerian economy to eliminate or minimize those constraints towards human capital development so as to enhance rapid economic growth.

1.2 Statement of Problem

In Nigeria, the rate of illiteracy is very high. Most of the workers are unskilled and they make use of outmoded capital, equipment and methods of production. By implication, their marginal productivity is extremely low and this leads to low real income low savings, low investment and consequently low rate of capital formation. It was indicated on the document that adult literacy rate of at least 65% would be attained by 2008. Therefore the strategy aimed at empowering the citizenry to acquire the skills and knowledge that would prepare them for the vast challenges. Overtime, the following issues relating to the concept have remained unresolved: Uneven distribution of skilled manpower, Poor reward system retarding the acquisition and development of human capital.

  • Research Questions

1.What isthe structure of human capital development in national economic trend?

  1. What isthe various means of human capital development in relation to human productivity?
  2. What arethe relative size and trends of human capital development and its possible prospects in the emerging global economic growth?

   1.4 Objectives of the Study

The broad objective of this study is to evaluate the impact of human capital development on economic growth in Nigeria.

The specific objectives are as follow:

  1. To examine the structure of human capital development in national economic trend;
  2. The various means of human capital development in relation to human productivity;
  3. The relative size and trends of human capital development and its possible prospects in the emerging global economic growth.
    • Research Hypotheses

The following hypotheses are formulated to provide the lead for this study:

Hypothesis One

Ho: Human capital development is not influence by national economic trend.

H1: Human capital development is influence by national economic trend.

Hypothesis Two

Ho: Human productivity do not affect human capital development

H1: Human productivity affect human capital development


Hypothesis Three

Ho:There is no significant relationship between human capital and economic growth.

H1: There is significant relationship between human capital and economic growth.

1.6 Significance of the Study:

The study of this nature is prompted by the slow rate of Nigeria’s economic growth despite the huge contribution of the government. Researches on this topic being carried out over the years have not really achieved its prior objective. The effect of human capital development on economic growth holds a lot of benefits to our overall economic progress. The government and its agencies will find this work resourceful in formatting policy, directives and regulations for human capital development to aid economic growth.

1.7 Organization of the Study

This research work is divided into five sections; section one comprises of the introductory background of the study. Section two covers the theoretical framework and literature review while section three majors in the research methodology; section four is discussion and interpretation of results. Section five then covers the summary of findings, conclusion and policy recommendations.