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ABSTRACT
The study empirically examines the relationship between industrial growth and human capital development in Nigeria. Nigeria is one of the biggest economies in the world with a population of over 201 million. Despite the huge population, the industrial sector in the country has been devoid of adequate human capital resource owing to high rate of illiteracy with insufficient access to health care. The country faces low industrial output which slow down economic growth. To investigate the long-run relationship between industrial growth and human capital development in the country, the Johansen Co-integration Test is applied. The unit root test is employed to test whether the time series variables are non-stationary and possess unit root. Furthermore, the vector error correction model is employed to estimate the regression coefficients and to correct for any disequilibrium between short run and long run dynamics of the model. The results of the unit root test shows that industrial output is stationary at level, while secondary school enrollment and government health spending are non-stationary. Also, the result of the Johansen Co-Integration test shows that there is Co-Integration or long-run relationship among the variables employed in this study. The coefficient of R 2 is found to be 91% which indicates that the explanatory variables were able to account for 91% of the total variations in the dependent variable. The value of Durbin-Watson statistic (DW) shows that there is no presence of auto-correlation; hence the model produced a parsimonious result. Also, as predicted by theory, the result of VECM shows that there is a positive relationship between industrial growth and human capital development, as human capital improves, the growth of industry tend to increase. The study therefore recommends significant funding of education and massive investment in the health care as industrial growth is considered a necessary requirement for sustainable economic development.
Keywords: Human Capital, Industrial Growth, Education, Health.
