ABSTRACT:

This study investigated the impact of government expenditure on human capital development on economic growth in Nigeria from 1980 to 2016. The study used real gross domestic product (RGDP) as proxy for economic growth as the dependent variable; while government expenditure on education (GEXED) and government expenditure on health (GEXHT) as proxies for government expenditure on human capital development as the independent variables. The study adopted descriptive statistics and Ordinary Least Square as the estimation techniques of analysis. The descriptive statistic results showed evidence of significant variation in the trends of the variables over the sample period. This is shown by the significant difference between the maximum and minimum values of the series. Regarding the statistical characteristics of the series, the results showed that all the variables are positively skewed. Again, the short run regression analysis (OLS) revealed that the coefficient of GEXED is positively signed and statistically significant at 5% level while the coefficient of GEXHT though negatively signed but statistically significant at 5% level. The study concludes that government expenditure on education has significant positive impact on economic growth in the short run while government expenditure on health has negative significant impact on economic growth in the short run in Nigeria. The study recommended amongst others that government should formulate and implement a holistic policy on education and health; with this, education and health will contribute optimally to economic growth in the short run in Nigeria.