Education and Nigeria Economic Growth Nexus: A VECM Approach


Authors : Ihugba, Okezie A; Obiukwu, Sandralyn; Akobundu, Precious .L

Volume/Issue : Volume 6 - 2021, Issue 5 - May

Google Scholar : http://bitly.ws/9nMw

Scribd : https://bit.ly/2QLSa1w

This study used annual data from 1970 to 2019 to test hypotheses formed using econometric techniques about the relationship between education and economic growth in Nigeria. The implementation of cointegration analysis and vector error correction model captured long-run and short-run relationships among variables in this regard (VECM). Cointegration was performed using Johansen co-integration tests, with the outcome requiring VECM. To evaluate the study duration, ex-ante and ex-post forecasting using variance decomposition and impulse response were used. The study also used an F-/Wald test simulation to look at short run causality relationships between series using the VECM Granger causality method. Both real education expenditure and credit to the private sector have positive relationships with economic growth, according to the empirical findings. Both human capital and the secondary school enrolment ratio affect economic growth, according to the VECM Granger causality result. A closer examination of the impulse response mechanism reveals that human capital can have a positive long-term and short-term impact on economic growth. Furthermore, studies show that credit to the private sector has always played an important role in contributing to economic growth. Based on the results, the study suggests that government improve investment in infrastructure and projects that will help education grow.

Keywords : Education, Economic Growth; Cointegration Test; VECM, Nigeria.

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