Human Capital Development and Industrialization in Nigeria: Implication for Economic Growth

Keywords: Human Capital, industrialization, Growth, Two Stage Least Square


This paper examines the role that human capital plays in the relationship between the industrialization process and growth in Nigeria spanning the period 1980 to 2016. The theoretical framework is rooted in one of the new growth theories traceable to Lucas (1988) with emphasis on human capital's role in growth. Through some modifications, we result in two simultaneous equation models, one with growth as a dependent variable and the other, industrialization as a dependent variable. Human capital is disaggregated into male and female literacy rates, male and female life expectancies and other control variables used to explain the growth and industrialization process. The Two-Stage Least Squares adopted gives the expected outcome in most cases for the two model estimations. It is shown that the industrialization process is germane for economic growth, and likewise, male literacy rates can complement the industrial process to improve growth. In the same vein, stable growth facilitates the process of industrialization while human capital variables too play a relevant role in the same process. Identification of the workings of the Nigerian state would be a good foundation for the step towards ameliorating the problems of capacity building and industrialization in Nigeria.


Download data is not yet available.


Metrics Loading ...

Author Biographies

Jimoh Saka, Lagos State University - Nigeria

PhD degree in Economics with interest in International Economics, Econometrics and Development Economics. 

Dayo Benedict Olanipekun, Ekiti State University - Nigeria

PhD degree in Economics with interest in International Economics and Development Economics. 



Adejumo A.V., Olomola P.A., & Adejumo O.O. (2013). The Role of Human Capital in Industrialization Development: The Nigerian case (1980-2010). Modern Economy, 4, 639-651.

African Economic Outlook (2017). Entrepreneurship and Industrialization. AfDB

Anyawu S.O, Adam J.A., Obi B., Yelwa M. (2015). Human Capital Development and Economic Growth in Nigeria. Journal of Economics and Sustainable Development, 6(14), 16-26

Barro R. J. (2001). Human Capital and Growth. The American Economic Review, 91(2), 12-17.

Connolly M. (2004). Human Capital and Growth in Postbellum South: A separate but unequal story. The Journal of Economic Theory, 64(2), 363-399.

Conrad D.A. (2011). The Level-specific Effects of Education on Economic Growth: Evidence from four Caribbean countries. The Journal of Developing Areas, 45, 279-290.

Curs B. R., Bhandari B., Steige C. (2011). The Roles of Public Higher Education Expenditure and the Privatization of the Higher Education on U.S. economic growth. Journal of Education Finance, 36(4), 424-441.

Fleisher B., Li. H. and Zhao M.Q. (2010). Human Capital, Economic Growth and Regional Inequality in China. Journal of Development Economics, 92, 215-231.

Galor O. (2011). Unified Growth Theory, Princeton University Press, Princeton, NJ DOI:10.1057/9780230226203.0434.

Galor O. (2005). From stagnation to growth theory. In P. Aghion and S. Durlauf (Eds.). Handbook of Economic Growth. (pp.171-293). Elsevier

Gennaidi N., Porta R.L., Lopez-de-Silanes D., Shleifer A. (2013). Human Capital and Regional Development .Quarterly Journal of Economics, 128 (1), 105-164.

Gopalakrishna B.V., Rao J. (2012). Economic Growth and Human Development: The Experience of Indian States. Indian Journal of Industrial Relations, 47(4), 634-644.

Hanushek E.A and Kimko D.D (2000). Schooling, Labor-force Quality, and Growth of Nations. American Economic Review 90(5), 1184-1208.

Hanushek E.A. (2013). Economic Growth in Developing Countries: The Role of Human Capital, Economics of Education Review, Accessed

Human Capital Report (2016). Employment, Skills and Human capital, World Economic Forum 2015, Davis-Klosters, Switzerland.

Kanayo O. (2013). The Impact of Human Capital Formation on Economic Growth in Nigeria. Journal of Economics, 4(2) 121-132.

Khan M.K. (2015). Contribution of Female Human Capital in Economic growth: An Empirical Analysis of Pakistan (1972-2012). Quality and Quantity: International Journal of Methodology, 50(2), 709-728

Kim C., Hong M. (2010). Education Policy and industrial Development: The Cases of Korea and Mexico. Journal of International Area Studies, 17(2), 21-30.

L’Angevin C., Laib N. (2005). Education et Croissance en France et dans un Panel de 21 Pays de OCDE, Document de travail, Direction des etudes et syntheses economiques G2005-08, INSEE, Paris.

Lucas R.E. (1988). On the Mechanics of Economic Development. Journal of Monetary Economics, XXII, 3-42.

Mankiw N.G., Romer D., Weil D.N. (1992). A Contribution to the Empirics of Economic Growth. The Quarterly Journal of Economics, 107(2), 407-437.

Madhu S. A. K. (2017), Does Female Human Capital Contribute to Economic Growth in India? An Empirical Investigation. International Journal of Social Economics, 44(11), 1506-1521.

Ossadzifo K. (2019), Industrialization and Economic Growth in Sub-Saharan Africa: The Role of Human Capital in Structural Transformation. Journal of Empirical Studies, 5(1), 45-54.

Oyinlola M.A., Adedeji A.A., Bolarinwa M.O. (2019). Exploring the Nexus Among Natural Resource Rents, Human Capital and Industrial Development in the SSA region. Economic Change and Restructuring 53, 87-111.

Pelinescu E. (2015). The Impact of Human Capital on Economic Growth. Procedia Economics and Finance, 22, 184-190.

Ramcharan R. (2004). Higher or Basic Education? The Composition of Human Capital and Economic Development. IMF Staff Papers, 51(2), 309-326.

Romer P.M. (1990). Endogenous Technological Change. Journal of Political Economy, 98(5), 71-102.

­­­­Romer P.M (1994). The Origins of Endogenous Growth. The Journal of Economic Perspectives, 8(1), 3-22.

Shuaibu M., Oladayo P.T. (2016), Determinants of Human Capital Development in Africa: A Panel Data Analysis, Oeconomia Copernicana, 7(4), 523-549.

Solow R.M. (1956). A Contribution to the Theory of Economic Growth. The quarterly journal of economics, 70(1), 65-94.

Sulaiman C., Bala U. Tijani B.A., Waziri S.I., Maji I.K. (2015). Human Capital, Technology and Economic Growth: Evidence from Nigeria. International Economics, 5(4).

Teixeira A.A.C., Fortuna N. (2010). Human Capital, R&D, Trade and Long-run Productivity. Testing the Technological Absorption Hypothesis for the Portuguese Economy, 1960-2001. Research Policy, 39, 335-350.

Turnovsky S.J. (2011). The Accumulation of Human Capital and Income Inequality in a Two-sector Economy. Journal of Human Capital, 5(4), 418-452.

UNESCO (2016). The Role of Technology and Innovation in Inclusive and Sustainable Industrial Development. Industrial Development Report, 2016.

Uzawa H. (1965). Optimal Technical Change in an Aggregative Model of Economic Growth. International Economic Review, 6(1), 18-31.

Vandenbussdie J., Aghion P., Meghir C. (2006). Growth Distance to Frontier and Composition of Human Capital. Journal of Economic Growth, 11(2), 97-127.

WDI (2016). World Development Indicator Database. World Bank.–1-4648–0683–4

How to Cite
Saka, J., & Olanipekun, D. B. (2021). Human Capital Development and Industrialization in Nigeria: Implication for Economic Growth. Religación, 6(27), 280-295.