ABSTRACT
This research investigates the relationship between government expenditure on education and human capital development in Nigeria from 1990 to 2021. The primary aim is to assess the impact of government investment in education on the Human Development Index (HDI) while considering the interplay of variables like Real Gross Domestic Product (RGDP), Secondary School Enrollment Rate (SSER), and Unemployment Rate (UNEM). The Error Correction Model (ECM) serves as the methodology for this study, enabling the exploration of short-term and long-term relationships between variables. Findings indicate a significant and positive correlation between Total Government Expenditure on Education (TGEE) and HDI, highlighting the pivotal role of education funding in enhancing human capital development. However, while economic growth, represented by RGDP, demonstrates a positive association with HDI, it lacks statistical significance, suggesting that economic growth alone may not guarantee substantial improvements in human development indicators. Moreover, increased access to education, as measured by SSER, positively impacts HDI, though without statistical significance. This underscores the need to address barriers to education access. Additionally, a negative relationship between Unemployment Rate (UNEM) and HDI, though not statistically significant, emphasizes the complex interaction between unemployment and human development. Policy recommendations include prioritizing education investment, ensuring equitable access, promoting vocational education, and adopting a holistic approach to human development that encompasses healthcare, poverty reduction, and infrastructure development. Consistent funding commitment and collaboration with diverse stakeholders are key to improving education outcomes and, by extension, human capital development in Nigeria. In conclusion, this research underscores the critical role of education funding in fostering sustainable human capital development in Nigeria.
