Effects of Capital Formation Rate, Employment Rate and Enrolment Rate in the Education Institutions on Economic Growth in Nigeria
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Date
2022
Authors
Animba, Adaolisa Ruth
Journal Title
Journal ISSN
Volume Title
Publisher
Kenyatta University
Abstract
Enrolment in the education institutions aids in equipping graduates in work performance and proficiency in chosen occupation. Capital formation leads to growth in the stock of plants and equipment while employment leads to growth in labour which is an input in the production process. Economic growth is fundamental to any nation. The essential ingredients that lead to economic growth of a country are capital formation, enrolment in the educational institutions, and employment among other inputs. Nigerian government has put in place policies like the Girl Child Education, Universal Basic Education, Structural Adjustment Programme and National Economic Empowerment and Development Strategy, to increase enrolment in the education institutions, capital formation and employment opportunities so as to increase economic growth. However, despite these efforts, economic growth has been on a declining trend in Nigeria, for instance in 1984 growth rate fell up to -13 percent, in 1993 it was 0.5 percent, in 2016 growth rate was about 0.3 percent. Empirical evidence on why this is so has not been conclusive and contradictory results have been given by several studies. The research objectives of this study were to: determine the effect of enrolment rate in the education system on economic growth; analyse the effect of capital formation rate on economic growth; and find out the effect of employment rate on economic growth. Time series data was utilized for this research. Data were collected from the Nigerian Statistical Abstracts, World Development Indicators and Economic Surveys from 1981-2018. The study utilized explanatory research design. Autoregressive distributed lag approach was used for estimation purposes. From the result of the estimation, primary school enrolment rate had no effect on economic growth, secondary school enrolment rate had a positive effect on economic growth and tertiary enrolment rate had no effect on economic growth. Gross fixed capital formation had no effect economic growth, whereas employment rate had a positive influence on economic growth. From the findings, it was evident that employment rate and secondary school enrolment rate in Nigeria are vital for growth. Therefore, the government should continue to gear policies towards creating employment opportunities and also encourage employment opportunities in the country. The government of Nigeria should also encourage policies to boost secondary school enrolment rate through improving curriculum, upgrading teachers and teaching aid and also setting good standards for schools to follow. Lastly government should improve policies and systems so as to encourage capital formation rate and improve primary and tertiary enrolment rate in education.
Description
A Project Submitted to the Department of Applied Economics in Partial Fulfilment of the Requirements for the Award of Master of Economics (Cooperation and Human Development) Degree of Kenyatta University, June, 2022
Keywords
Effects, Capital Formation Rate, Employment Rate, Enrolment Rate, Education Institutions, Economic Growth, Nigeria