Abstract
Different theories show that human capital is an important driver for economic development and growth. Still, there has been some controversy about the issue over the last decade. Several alternating ways of optimism and skepticism on the relevance of human capital drive agricultural output to generate economic growth. Therefore, this study examines the relationship between human capital development and agricultural output on economic growth. It aims to analyze the level of education that makes the most significant contribution to agricultural output growth by using enrollment rates at different levels of schooling for human capital.
A dataset of relevant variables for the period 1970 through 2017 was obtained from the National Bureau of Statistic, Central Bank of Nigeria, Federal Ministry of Education, and World Bank's World Development indicator (2018) database. Two indicator proxies for Human Capital were education which was disaggregated into Primary, secondary and tertiary gross enrollment rate, and health was measured by life expectancy. Agricultural output was proxy by agricultural value-added, and the other variables are economic growth, gross capital formation, crude death rate, population, and labour force. The Two-Stage Lease Square, Auto-Regressive Distributed Lag (ARDL), and Vector Error Correction Models (VECM) were specified, and the Ordinary Least Square methods were adopted in estimating the models. The estimation of the models was specified and the preliminary analyses undertaken include descriptive statistics, correlation analysis, variance decomposition, and impulse response function analysis, test for unit root test, cointegration, Granger causality test, Wald test, and bounds test among variables; some post diagnostic test was also conducted to ascertain the reliability of the estimated models such as Jarque-Bera test, Breusch-Godfrey Lagrangian Multiplier, Serial correlation test, Heteroscedasticity, Cumulative sum of Recursive residuals and Cumulative sum of Squares Recursive residuals.
The estimated result of the two-stage lease square indicated that primary education does not significantly impact agricultural output growth. In contrast, secondary and tertiary education has a significant positive effect on agricultural growth. Also, this study's empirical results suggest that life expectancy, as an important part of human capital, has a direct impact on agricultural output growth. From the ARDL, the empirical evidence strongly suggests that agriculture makes a significant contribution to economic growth. The result from VECM indicates the validity of the long and short-term causality in the direction from economic growth (GDP), health human capital (LIF), gross capital formation (CAP), agricultural output (AGR), and for Education (SCH). The study recommends, amongst others, intensification of effort in human capital development in Nigeria by strengthening the healthcare system to respond to the population's health needs; these measures will help improve the life expectancy of the population.
