Human Capital Development: A Pathway to Achieving Demographic Dividend in Nigeria
Keywords:
Human capital development, Demographic dividend, Youth population Growth, Economic growth, Sustainable developmental goals (SDGs)
Abstract
The rise in the youth population growth in developing economies, as it relates to demographic dividend and economic growth, is a crucial discourse for researchers and policy makers. Presently, Nigeria is in the second stage of the demographic transition theory. Human capital development can fast track the attainment of demographic transition and subsequently demographic dividend. Right investment in human capital via education requires thorough understanding of the manpower need for a growing economy like Nigeria. This paper examined the unique correlation between human capital development and demographic dividend proxied by youth population growth in Nigeria. The Autoregressive Distributed Lag (ARDL) is employed for the analysis of this paper which spanned from 1981 to 2022. The findings suggest that human capital development is a major channel through which the demographic dividend is derived in the long run. It underscores the critical role of right investment in education and skills development for unlocking the productive potential of the youth in Nigeria. Equally crucial is the need to optimally utilize the human capital after developing them. The policy implication is that in order to achieve demographic dividend, Nigeria would require right investment in human capital which will consequently reduce fertility and mortality thereby, leading to a more sustainable youth population.
References
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Romer, P. (1990). Endogenous technological change. Journal of Political Economy, 98(5), 71–102. https://doi.org/10.1086/261725
Schultz, T. W. (1961). Education and economic growth. In N. Henry (Ed.), Social forces influencing American education (pp. 1–12). University of Chicago Press.
Schultz, T. W. (1999). Health and school investment in Africa. Journal of Economic Growth, 13(1), 67–88. https://doi.org/10.1257/jep.13.3.67
Segerstrom, P., Anant, T. C., & Dinopoulos, E. (1990). A schumpeterian model of the product life cycle. American Economic Review, 80, 1077–1091.
Soares, R. R. (2014). Gary Becker’s contributions in health economics. In IZA Discussion Paper No. 8586. The Institute for the Study of Labor.
Solow, R. M. (1956). A contribution to the theory of economic growth. The Quarterly Journal of Economics, 70(1), 65–94. https://doi.org/10.2307/ 1884513
Swan, T. W. (1956). Economic growth and capital accumulation. Economic Record, 32(2), 334–361. https://doi.org/10.1111/j.1475-4932.1956.tb00434.x
United Nations (2015). Transforming Our World, The 2030 Agenda for Sustainable Development. Resolution Adopted by the General Assembly on 25 September 2015, 42809, 1-13.
Williamson, J. G. (2001). Demographic change, economic growth, and inequality. American Economic Review, 91(4), 869-873.
Zhou, J., Deng, J., Li, L., & Wang, S. (2023). The Demographic Dividend or the Education Dividend? Evidence from China’s Economic Growth. Sustainability, 15(9), 7309.
https://mitpress.mit.edu/books/endogenous-growth-theory
Aleksynska, M., & Schindler, M. (2011). Labor market institutions in advanced and developing
countries: A New Panel Database. IMF Working Paper No. 11/ 154. International Monetary Fund.
Anowor, O. F., Ichoku, H. E., Onodugo, V. A., & McMillan, D. (2020). Nexus between healthcare
financing and output per capita: Analysis of countries in ECOWAS sub-region. Cogent Economics & Finance, 8(1), 1832729. https://doi.org/10.1080/23322039.2020. 1832729
Anowor, O. F., Ichoku, H. E., Onodugo, V. A., Ochinanwata, C., & Uzomba, P. C. (2023). Does
investment in education and health impact youth employment outcomes? Evidence from Sub-Saharan Africa. Cogent Economics & Finance, 11(1), 2160128.
Bartelsman, E., Haltiwanger, J., & Scarpetta, S. (2004). Microeconomic evidence of creative
destruction in industrial and developing countries. Mimeo, University of Maryland.
Barro, R. J. (1991). Economic growth in a cross section of countries. The Quarterly Journal of
Economics, 106(2), 407–443. https://doi.org/10.2307/2937943
Barro, R. J. (2001). Human Capital and Growth. The American Economic Review, 91(2), 12–17.
https://doi. org/10.1257/aer.91.2.12
Bawazir, A. A., & Nor, S. M. (2023). Demographic structure, human capital, and economic
growth: Evidence from Turkey. International Journal of Professional Business Review: Int. J. Prof. Bus. Rew, 8(7), 23.
Becker, G. S. (1962). Investment in human capital: A theoretical analysis. Journal of Political
Economy, 70(5), 9–49. https://doi.org/10.1086/258724
Becker, G. (1964a). Human capital. Colombia University Press for the National Bureau of
Economic Research.
Bloom, D. E., Canning, D., & Sevilla, J. (2003). The Demographic Dividend: A New Perspective on the Economic Consequences of Population Change. New York: RAND Corporation.
Caballero, R., & Hammour, M. (1996). On the timing and efficiency of creative destruction.
Quarterly Journal of Economics, 111(3), 805–852. https://doi.org/10.2307/2946673
Choo, E. & Gee, C. (2024). Age and education effects in Singapore’s demographic dividend 1970–
2020. The Journal of the Economics of Ageing, 27.1000482.
Danquah, M., & Ouattara, B. (2014). Productivity growth, human capital and distance to frontier
in Sub-Saharan Africa. Journal of Economic Development, 39(4), 4–24. https://doi.org/10.35866/caujed.2014.39.4.002
Dimbuene, Z. T., & Matondo, S. M. (2024). Demographic Dividend in Sub-Saharan Africa–
Toward Mitigating Social Inequality? A Critical Analysis of the Enabling Environment.
Firmansyah, D. (2023). Demographic Dividend: Age Structure, Education and Economic
Growth. Jurnal Ekonomi, Manajemen dan Akuntansi,1(3), 181-188.
Hammed, O. M., Agboola, H. Y., & Kafilah, L. G. (2019). Endogenous specification of foreign capital inflows, human capital development and economic growth: A study of pool mean group. International Journal of Social Economics. https://doi.org/10.1108/IJSE-04- 2018-0168
Igboanugo, I. N., & Dauda, R. O. (2019). Education, Health Expenditure and the Quality of Life in Nigeria. Academic Journal of Economic Studies. 5(4), 94-102.
Igboanugo, I.N. & Saibu, O.M. (2021). Infant-Child Mortality and Maternal Employment in Nigeria. Ovidius Universiy Annals, Economic Sciences Series. XXI (1),119-126.
Igboanugo, I.N. & Nwakeze, N. M. (2023). Nutrition, Maternal Mortality, And Quality of Life in Nigeria. American International Journal of Business Management (AIJBM), 6(9),54-64.
Lucas, R. (1988). On the mechanics of economic development. Journal of Monetary Economics,
22(1), 3–42. https://doi.org/10.1016/0304-3932(88)90168-7
McDonald, S., & Roberts, J. (2002). Growth and multiple forms of human capital in an augmented
Solow model: A panel data investigation. Economics Letters, 74(2), 271–276. https://doi.org/10.1016/S0165-1765(01)00539-0
Mincer, J. (1996). Economic development, growth of human capital, and the dynamics of the wage
structure. Journal of Economic Growth, 1(1), 29–48. https://doi.org/10.1007/BF00163341
Olasehinde N., O. Olaniyan, A. Soyibo, A. Lawanson, R. Dauda, O. Odufuwa, O. Awodumi, T. Olalude, O. Adonri and A. Dasogot, (2024). Demographic Dividend in Nigeria: Evidencefrom Country and Sub-Country Application of National Transfer Accounts (NTA) Approach, Health Policy Training and Research Programme (HPTRP) Working Paper 2024-1, University of Ibadan, Nigeria.
Onodugo, V. A., Obi, K. O., Anowor, O. F., Nwonye, N. G., & Ofoegbu, G. N. (2017). Does public spending affect unemployment in an emerging market? Risk Governance & Control: Financial Markets & Institutions, 7(1), 32–40. http://dx.doi.org/10.22495/rgcv7i1art
Oosthuizen, M. (2024). Education and South Africa’s waning demographic dividend. The Journal of the Economics of Aging, 27, 1004824.
Rebelo, S. T. (1991). Long-run policy analysis and long-run growth. Journal of Political Economy, 99(3), 500–521. https://doi.org/10.1086/261764
Renteria, E., Souto, G., Mejia-Guevera, I., & Patrot, C. (2016). The Effect of Education on the Demographic Dividend. Population and Development Review, 42(4),651- 671.
Romer, P. (1986). Increasing returns and long-run growth. Journal of Political Economy, 94(5), 1002–1037. https://doi.org/10.1086/261420
Romer, P. (1990). Endogenous technological change. Journal of Political Economy, 98(5), 71–102. https://doi.org/10.1086/261725
Schultz, T. W. (1961). Education and economic growth. In N. Henry (Ed.), Social forces influencing American education (pp. 1–12). University of Chicago Press.
Schultz, T. W. (1999). Health and school investment in Africa. Journal of Economic Growth, 13(1), 67–88. https://doi.org/10.1257/jep.13.3.67
Segerstrom, P., Anant, T. C., & Dinopoulos, E. (1990). A schumpeterian model of the product life cycle. American Economic Review, 80, 1077–1091.
Soares, R. R. (2014). Gary Becker’s contributions in health economics. In IZA Discussion Paper No. 8586. The Institute for the Study of Labor.
Solow, R. M. (1956). A contribution to the theory of economic growth. The Quarterly Journal of Economics, 70(1), 65–94. https://doi.org/10.2307/ 1884513
Swan, T. W. (1956). Economic growth and capital accumulation. Economic Record, 32(2), 334–361. https://doi.org/10.1111/j.1475-4932.1956.tb00434.x
United Nations (2015). Transforming Our World, The 2030 Agenda for Sustainable Development. Resolution Adopted by the General Assembly on 25 September 2015, 42809, 1-13.
Williamson, J. G. (2001). Demographic change, economic growth, and inequality. American Economic Review, 91(4), 869-873.
Zhou, J., Deng, J., Li, L., & Wang, S. (2023). The Demographic Dividend or the Education Dividend? Evidence from China’s Economic Growth. Sustainability, 15(9), 7309.
Published
2025-01-26
Section
Articles
