IIARD International Institute of Academic Research and Development

INTERNATIONAL JOURNAL OF ECONOMICS AND FINANCIAL MANAGEMENT (IJEFM )

E-ISSN 2545-5966
P-ISSN 2695-1932
VOL. 5 NO. 2 2020

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A Generalized Method of Moments Approach of Examining the Impact of Public Expenditure on Health and Education Exert on Nigeria’s Economic Growth.

Ekpete, S. Marshall, (PhD), Wachukwu, I. Princewill, (PhD) & Iyo, Ipeghan, (PhD)

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Abstract

This study investigates empirically the relationship between human capital (health and education) expenditure and economic growth in Nigeria using time series data from 1985- 2018. We employed the ADF Unit root test and the Generalized Method of Moments technique to account for persistence in the country over time. The estimation results show that the lagged value of Gross Domestic Product Per Capita appears to persist over time. While a positive relationship between Public Education Expenditure Per Capita (PEEPC) and GDP Per Capita was established. Unexpectedly, Public Health Expenditure Per Capita (PHEPC) had a negative relationship with the GDP Per Capita, despite the increased Public Health budgetary allocation in Nigeria. Evidently, the contribution of Health to the Gross Domestic Product is marginally low. Therefore, the study recommends that policymakers should sustain and strive to increase spending on education to meet up with the UNESCO budget recommendation of 26%. And also put in place an effective public financial management system that will reduce leakages and guarantee proper utilization of budgetary allocations on Health and Education

keywords:

Human Capital, Public Health Expenditure, Public Education Expenditure, Economic Growth.

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