Human Resource Development, Economic Growth and Poverty Reduction In Nigeria

HRMARS - Amid growing concerns about how developing economies can strengthen human resource capacity to drive long-term development, this study examined the effect of human resource development on economic growth and poverty reduction in Nigeria using annual data spanning 1996 to 2024. Human resource development was measured through government expenditure on education (LEXPE), government expenditure on health (LEXPH), secondary school enrolment (LESI), and tertiary school enrolment (LETI) on economic growth (LGRGDP) and poverty reduction measured at the international poverty line (LPOVL). The study adopted the Phillips and Perron (PP) unit root test to determine the order of integration of the variables, and employed the Autoregressive Distributed Lag (ARDL) framework and the bounds testing procedure to establish both long-run and short-run relationships for the growth and poverty models. The long-run results showed that LEXPE, LESI and LETI exerted significant positive effects on LGRGDP, confirming the productivity-enhancing role of education, while LEXPH had a significant negative long-run effect on growth, indicating inefficiencies in the health sector. For the poverty model, LETI was the only variable with a significant long-run effect on reducing LPOVL, although both LESI and LETI produced strong short-run reductions in poverty. The short-run estimates for the growth model indicated that changes in LESI and LETI continued to stimulate LGRGDP, while LEXPE and LEXPH showed no immediate influence. The error correction terms for both models were negative and highly significant, confirming rapid convergence to long-run equilibrium. Granger causality tests revealed bidirectional causality between LEXPE and LGRGDP, and strong bidirectional causality between LPOVL and both LESI and LETI, suggesting that educational participation not only influences poverty outcomes but is also shaped by welfare conditions. Overall, the findings demonstrate that human resource development, particularly through secondary and tertiary education, plays a central role in shaping Nigeria’s economic trajectory and poverty outcomes. Thus, the study recommends that policymakers prioritise sustained increases in LEXPE, improve the efficiency of LEXPH, expand access to LESI and LETI, and develop coordinated strategies that link human resource development to Nigeria’s long-term growth and poverty reduction objectives.