THE IMPACT OF HUMAN RESOURCE EMPLOYMENT ON ECONOMIC GROWTH IN NIGERIA (1990-2018)

Abstract

This study verifies the impact of human resource employment on economic growth in Nigeria (1990-2018). A nation cannot experience economic growth without human capital. And for human capital to actually have any impact on economic growth some investments have to be made. Investment in human capital consists of; investment in education, training, health and other social services that will help in enhancing the productive capacity of labor. This project examines the impact of human of resource employment on economic growth in Nigeria from 1990-2018. The research result shows that foreign direct investment does not have much impact on economic growth while human capital which was proxied by total government expenditure, labor life expectancy and stock of physical product, and their impact on economic growth.  Comparing Nigeria to most countries we can see that the rate of investment in human capital is low. Therefore in order to increase its formation and thereby accelerate economic growth, much attention should be paid to expenditure on education, health and other socio-economic infrastructure that will enhance the productivity of labor. Attempts should be made to restructure the educational system to meet the challenges of the society.

CHAPTER ONE

INTRODUCTION

• Background of the study

Human resources constitute the ultimate basis for the wealth of nations. Capital and natural resources are passive factors of production; human beings are the active agents who accumulate capital, exploit natural resources, build social, economic and political organization, and carry forward national development. Clearly, a country which is unable to develop the skills and knowledge of its people and utilize them effectively in the national economy will be unable to develop anything else (Harbison, 1973). Regardless of physical capital, the importance of human resource development (HRD) in the process of economic growth has been theoretically outlined in a couple of leading endogenous versions of the neoclassical theory of growth: Lucas (1988) and Romer (1986, 1990). These models indicated the importance of human capital and intangible capital as the source of technological progress leading to economic growth. In the year 1962, Gary Becker first explained ‘human capital’ under a theoretical framework and suggested to treat education as an investment to increase productive capacity and higher earning potentials of the labour force (Machin and Vignoles, 2005). In a similar fashion, Uzawa (1965) defined ‘human capital’ by the purposive education and training of workers. Intangible or less tangible capital is referred to good institutional arrangements, transparent government, absence of corruption, free press and media, facilities and practices to adopt ideas and diffusion of advanced knowledge, stable politics, etc. (Webster & Jensen, 2006). Webster & Jensen (2006) highlight the importance of intangible capital as follows: In recent times, it has been argued that intangible capital plays an increasingly important role in modern capitalist economies: academics, policymakers and the popular press talk about the emergence of a ‘new economy’ dominated by investments in human capital and ‘knowledge workers. The impact of human resource employment and economic growth in recent times emphasized the growth theory (Romer, 1986; Lucas, 1988). An interesting idea in their work was that in the long run, output per unit of input could increase even when inputs were exhaustively accounted for. Technically advanced human capital and a growing knowledge base appear to be part of this wellspring of growth. An implication of Lucas’ hypothesis on human capital is thus associated with investment in man and his development as creative and productive resources (Harbison, 1962). People are the most important asset a nation can have and there cannot be any form of economic development if the people don’t develop themselves. When we talk about human capital the capital being referred is the one embodied in human beings that yield income and other useful outputs over long period of time it could be schooling, a computer training course, expenditure of medical care and lectures on the virtues of punctuality and honesty are also capital. This is because it raises earnings, improve health, or add to a person’s good habit over much of his lifetime. The expenditures on education, medical care and so on are called investments in human capital; they are called human capital because people cannot be separated from their knowledge, skills health or values in the way that they can be separated from their financial and physical effect (Gary Becker 1964). We can therefore say that it is those innate abilities and various skills acquired by a person that makes up his capital. Due to this factor there can be no significant economic growth in any economy without adequate human and natural resources. The stock of human capital like the stock of natural and physical capital will deteriorate and decay if not increased and maintained through improvements in public health and sanitation, social welfare services, good nutrition and guaranteed employment schemes. The human capital formation indices should be integrated into the planning process in order to achieve a sustainable growth and development. The importance of human capital formation can be seen in the Khartoum declaration of 1998 which asserted that, the human dimension is the sine qua non of economic recovery.

• STATEMENT OF THE PROBLEM

As the global economy shifts towards more knowledge-based sectors (e.g. the manufacture of ICT devices, pharmaceuticals, telecommunications and other ICT based services, R&D),skills and human capital development becomes a central issue for policy makers and practitioners engaged in economic development both at the national and regional level(OECD,1996); yet the impact education and vocational training activities exert upon changing national and regional economies remain less than thoroughly explained and analyzed. Since the introduction of human capital theory in the 1960s, a number of studies have attempted to address this and related issues. Today, the global economy is divided into two parts comprising of a few rich nations regarded as the developed countries (DCs) and many poor nations regarded as the less developed countries (LDCs). DCs are characterized by high productivity while the LDCs are characterized by low productivity. According to the level of human capital development and per capita income, Nigeria is classified under the LDCs. Nigeria as a country is immensely endowed both in natural and human resources. The pool of resources from one end to the other is unquantifiable to such extent that, given a dynamic leadership, economic prosperity would have been achieved in late 20th century. The primary focus of Nigeria has been finding a way to accelerate the growth rate of national income and to engage in structural transformation of her subsistence and resource based economy to a production and consumption based economy in order to break the cycle of poverty, low productivity and stagnation.  In view of the above the study becomes pertinent to explore the impact of human resource employment on economic growth.

• OBJECTIVE OF THE STUDY

The study has one objective which is divided into general and specific objective, the general objective is to examine the impact of human resource employment on economic growth in Nigeria within (1990-2018). The specific objectives are;

1. To ascertain the impact of human resource employment on the economic growth of Nigeria
2. To ascertain if there is any significant relationship between human resource development and economic growth in Nigeria between 1990-2018

• To explore the merit between human resource education on economic in Nigeria

1. To proffer suggested solution to the identified problem
   • RESEARCH QUESTIONS
2. Does human resource employment has any impact on the economic growth of Nigeria?
3. Is there any significant relationship between human resource development and economic growth in Nigeria between 1990-2018?

• Is there any merit between human resource educations on economic in Nigeria?
  • RESEARCH HYPOTHESES

The following research hypotheses were formulated by the researcher to aid the completion of the study;

H₀: human resource employment does not have any impact on the economic growth of Nigeria

H₁: human resource employment does have an impact on the economic growth of Nigeria

H₀: there is no significant relationship between human resource development and economic growth in Nigeria between 1990-2018

H₂: there is a significant relationship between human resource development and economic growth in Nigeria between 1990-2018

• SIGNIFICANCE OF THE STUDY

It is believed that at the completion of the study, the findings will be of great importance to the management of organizations as the study seek to explore the importance of human resource employment on economic growth, the study will also be of great benefit to employer of labor on the need to employ qualify human resource personnel so as to the benefit that comes with it, the study will also be of great importance to researchers who intend to embark on a study in similar topic as the study will serve as a reference point to further research. Finally the study will be of great importance to student, teachers, academia’s and the general public as the study will contribute to the pool of existing literature and also contribute to knowledge on the subject matter.

• SCOPE AND LIMITATION OF THE STUDY

The scope of the study covers the impact of human resource employment on economic growth in Nigeria within (1990-2018) but in the course of the study, there are some factors that limit the scope of the study;

1. a) AVAILABILITY OF RESEARCH MATERIAL: The research material available to the researcher is insufficient, thereby limiting the study
2. b) TIME: The time frame allocated to the study does not enhance wider coverage as the researcher has to combine other academic activities and examinations with the study.
3. c) Organizational privacy: Limited Access to the selected auditing firm makes it difficult to get all the necessary and required information concerning the activities.

1.8 OPERATIONAL DEFINITION OF TIMES

HUMAN RESOURCE

Human resources is the company department charged with finding, screening, recruiting and training job applicants, and administering employee-benefit programs. HR responsibilities include compensation and benefits, recruitment, firing, and keeping up to date with any laws that may affect the company and its employees

HUMAN CAPITAL: Human capital is a term popularized by Gary Becker, an economist from the University of Chicago, and Jacob Mincer that refers to the stock of knowledge, habits, social and personality attributes

ECONOMIC GROWTH: Economic growth is the increase in the inflation-adjusted market value of the goods and services produced by an economy over time. It is conventionally measured as the percent rate of increase in real gross domestic product, or real GDP.

EDUCATION

Education is the process of facilitating learning, or the acquisition of knowledge, skills, values, beliefs, and habits. Educational methods include teaching, training, storytelling, discussion and directed research.

1.8 ORGANIZATION OF THE STUDY

This research work is organized in five chapters, for easy understanding, as follows

Chapter one is concern with the introduction, which consist of the (overview, of the study), historical background, statement of problem, objectives of the study, research hypotheses, significance of the study, scope and limitation of the study, definition of terms and historical background of the study. Chapter two highlights the theoretical framework on which the study is based, thus the review of related literature. Chapter three deals on the research design and methodology adopted in the study. Chapter four concentrate on the data collection and analysis and presentation of finding.  Chapter five gives summary, conclusion, and recommendations made of the study

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