International Journal for Research in Applied Science & Engineering Technology (IJRASET)

ISSN: 2321-9653; IC Value: 45.98; SJ Impact Factor: 7.538

Volume 11 Issue III Mar 2023- Available at www.ijraset.com

B. Johansen Co-integration Test

The Co-integration of the variables is shown in Tables 3 and 4 where the Unrestricted Co-integration Rank Test (Trace) and Unrestricted Co-integration Rank Test (Maximum Eigen value), respectively, show that the independent variables (all the proxies of Human Capital Development) are co-integrated to determine the dependent variable (GDP which is proxy for economic growth) adjudging that there is long run relationship between human capital development and economic growth. The variables are cointegrated with Eigen p-values: 0.0000, 0.0000, 0.0000, 0.0013 and 0.0351 at 5% level of significance and the complimentary (MaxEigen) co-integration p-values: 0.0000, 0.0015, 0.0103, 0.0163 and 0.0413 with the same level of significance. A long-run relationship therefore exists between the independent and dependent variables. Therefore, as long there is relationship between the dependent and independent variables, Nigerian government should relate well with the entire sectors under consideration so that consistency in the relationship is sustained to perpetually have lasting impacts on the Nigerian economy.

ISSN: 2321-9653; IC Value: 45.98; SJ Impact Factor: 7.538

Volume 11 Issue III Mar 2023- Available at www.ijraset.com

Table 4: Complimentary Co-integration (Unrestricted Co-integration Rank Test)

C. Null Hypothesis

There is no relationship between human capital development and economic growth in Nigeria. Table 3 and Table 4 showed co-integration tests, including the complimentary test and the unit root test (Table 2) deployed to test the hypothesis. Various levels of co-integration were shown hence, the tests showed that there is long run relationship between the independent and dependent variables. The null hypothesis is therefore rejected.

VI. CONCLUSION

This paper investigates the long run relationship between human capital development and economic growth in Nigeria through the application of the Johansen co-integration technique after carrying out unit root test using the Augmented Dickey-Fuller (ADF) test statistic. The human capital development investment by the government on Agriculture (AGR), Civil-Service (CIVSER), Education (EDU), Health (HLTH), Manufacturing (MANU) and Transportation (TRANSP) sectors depict how they will arrogate into economic growth. The results of the co-integrating technique show that there is long run relationship between human capital development and economic growth in Nigeria. As it was established in the study that there is long run relationship between the dependent and independent variables, it pertinent to submit and suggest that government should concentrate adequate finance on those vital economic variable that will make the human capital better, which will invariably enhance economic growth in Nigeria. Also, human capital is seen as vital factor for productivity as an economic axiom that will yield unto increasing growth in the country’s economy. A good performance of an economy in terms of per capita growth may therefore be attributed to a welldeveloped human capital base. A major policy implication of our result is that concerted effort from the government in all tiers should be made by policy makers to increase the level of human capital in Nigeria by investing into it adequately. Our study therefore supports the human capital as a source of economic growth hypothesis that must not be eschewed and underrated.

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