Human Capital Development and Poverty Reduction in Nigeria

Journal of Economics and Business

ISSN 2615-3726 (Online)

ISSN 2621-5667 (Print)

Published: 02 May 2018

Human Capital Development and Poverty Reduction in Nigeria

Dennis Brown Ewubare, ThankGod Mark

Rivers State University, Nigeria

Download Full-Text Pdf



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


Akande E.O. (2005). Health sector reforms in Nigeria. In: Akinkugbe O. and Oyediran K: The Sinews of success. Essays in honor of Kayode Osuntokun. Ibadan, The Benjamin Kayode Osuntokun Foundation,155-168.

Allahdadi, F. and Aref, A. (2011). Human Resource Development for Poverty Alleviation in Iran. Life Science Journal, 8(3), 83-86.

Bakare, A.S. (2006). The Growth Implications of Human Capital Investment in Nigeria: An Empirical Study. Journal of Economics and Social Studies, University of Ado-Ekiti,110-125

Becker, G. S. (1964).Human Capital: A Theoretical and Empirical Analysis. USA: University of Chicago Press.

Buddelmeyer, H. and Cai, L. (2009). Interrelated dynamics of health and poverty in Australia. IZA Discussion Paper No. 4602.

Chikelu, J. C. (2016). Impact of Human Capital Development on Poverty Reduction in Nigeria. Munich Personal RePEc Archive (MPRA), 1-6.

CIA World Factbook (2012). Life Expectancy at Birth. Available on: expectancy_at_birth.html

Davis, P. and Sanchez-Martine, M. (2014). A review of the Economic Theories of Poverty. National Institute of Economic and Social Research Discussion Paper No. 345, 2-65.

Dickey, D. A., and Fuller, W. A. (1981). Likelihood Ratio Statistics For Autoregressive Time Series with A Unit Root. Journal of the Econometric Society, 1057-1072.

Harbison, F. and Charles, M. (1964). Education, Manpower, and Economic Growth; strategy of human resource development. USA: McGraw Hill Book Company.

Johansen, S., and Juselius, K. (1990). Maximum likelihood estimation and inference on cointegration—with applications to the demand for money. Oxford Bulletin of Economics and statistics, 52(2), 169-210.

Jung, S. and Smith, R. (2007). The Economics of Poverty: Explanatory Theories to Inform Practice. Journal of Human Behavior in the Social Environment, 16(1-2), 21-39.

Khan, A., Iqbal, T., and Rehman, Z. (2016). Impact of Human Capital on Poverty Alleviation in District Karak, Khyber Pakhtunkhwa. The Dialogue, 11(2), 229-241.

Lydall, H.(1968). The Structure of Earnings.UK:  Oxford University Press.

Machin, S. (2009). Education and inequality in eds. W Salverda, B Nolan and T M Smeeding, The Oxford Handbook of Economic Inequality. UK: Oxford University Press.

National Bureau of Statistics (2005). Poverty Profile for Nigeria, Abuja.

OECD (1998). Human Capital Investment: An international comparison, Paris

Pemberton, S., Sutton, E., Fahmy, E. (2013). A review of the qualitative evidence relating to the experience of poverty and exclusion. PSE-UK Working Paper Methods Series No.22

Pervez, S. (2014). Impact of Education on Poverty Reduction: A Co-integration Analysis for Pakistan. Journal of Research in Economics and International Finance (JREIF), 3(4) pp. 83–89.

Phillips, P. C. B., and Hansen, B. E. (1990). Statistical inference in instrumental variables regression with I(1) processes. Review of Economics Studies 57,99–125.

Raja, N. (2005). Humanization of Education in Pakistan Through Freire’s Concept of Literacy. Asia Pacific Education Review, 1(6),1-6.

Reinstadler, A. and Ray, J. (2010). Macro determinants of individual income poverty in 93 regions of Europe.  CEPS-INSTEAD Working Paper N0. 13.

Risikat (2010). Income, schooling, and ability: Evidence from a New Sample of Identical Twins”. Quarterly Journal of Economics, 113-1.

Scott, E; London, A. and Edin, K. (2000). Looking to the Future, Welfare Reliant Women Talk about their Job Aspirations in the Context of Welfare Reform. Journal of Social Issues, 56. 727-746.

Self et al. (2004). Statistics on Child Labour and Hazardous Child Labour in Brief', Mimeo, Bureau of Labour Statistics, ILO, Geneva.

UNDP (2008). Human Development Indices. 2007/2008 Human Development Report, New York.

About Us

The Asian Institute of Research is an online and open-access platform to publish recent research and articles of scholars worldwide. Founded in 2018 and based in Indonesia, the Institute serves as a platform for academics, educators, scholars, and students from Asia and around the world, to connect with one another. The Institute disseminates research that is proven or predicted to be of significant influence for the general public.

Contact Us

Please send all inquiries to the email:

Business Address:

5th Floor, Kavling 507, Fajar Graha Pena Tower, Jl. Urip Sumohardjo No.20, Makassar, Indonesia 90234

Copyright © 2018 The Asian Institute of Research. All rights reserved

Stay Connected

  • Instagram - Black Circle
  • Facebook - Black Circle
  • LinkedIn - Black Circle