Does Human Capital Investment Matter for Economic Resilience? Evidence from Nigeria’s Development Indicators

This study investigated the impact of human capital investment on economic resilience in Nigeria between 1990 and 2023. The data utilized were sourced from the secondary sources like Central Bank of Nigeria publications, and World Bank World Development Indicators (WDI). Government expenditure on education and health were used as proxies for human capital investment, while real GDP and the human development index (HDI) served as development indicators (economic resilience). A long-run relationship was found to exist between human capital investment variables and the economic development variables in the models. The study applied the novel dynamic ARDL simulation model. The results of the study revealed that education spending had a positive but insignificant effect on real GDP and a negative impact on HDI. Conversely, health expenditure negatively affects real GDP, but significantly improves HDI. The outcomes of the Counterfactual shock analysis, showed that both increases and decreases in human capital investment reduce real GDP, while only health expenditure positively influences HDI. These findings suggest that the effectiveness of human capital investment in Nigeria is undermined by inefficiencies, calling for a reallocation of resources toward more outcome-oriented and productivity-linked strategies. The study concluded that, human capital investment is vital for economic resilience, but in the Nigerian context, its impact depends on how effectively education and health resources are allocated and managed. The study therefore recommended, the need for Nigeria to shift from inputdriven (spending) approaches to outcome and impact-driven investment strategies in education and health if it is to build a resilient, inclusive, and sustainable economy.