1.1 Background of the Study
The role of human capital in economic growth cannot be overemphasized. The development of human capital has been recognized by economists to be a key prerequisite for a country’s socio-economic and political transformation. Among the generally agreed causal factors responsible for the impressive performance of the economies of most of the developed and the newly industrializing countries is an impressive commitment to human capital formation (Adedeji and Bamidele, 2003; World Bank, 1995; Barro, 1991). This has been largely achieved through increased knowledge, skills and capabilities acquired through education and training by all the people of these countries. Human capital plays a key role in versions of both neoclassical and endogenous growth models (Mankiw, Romer and Weil, 1992; Rebelo, 1991; Sianesi and van Reenen, 2003). The critical difference is that in the first group, economic growth is still ultimately driven by exogenous technical progress, whereas in the second, no additional explanation is needed and human capital is much more important. Despite the success made so far in developing human capital and resources there is no corresponding job and job opportunities to accommodate them, thereby leading to unemployment.
Unemployment has been categorized as one of the serious impediments to social progress. Apart from representing a colossal waste of a country’s manpower resources, it generates welfare loss in terms of lower output thereby leading to income and well-being (Akinboyo 1987 and Raheem, 1993). Unemployment is a very serious issue in Africa and particularly Nigeria with its surging population.
The need to avert the negative effects of unemployment has made the tackling of unemployment problems to feature very prominently in the development objectives of many developing countries. Incidentally, most of these countries’ economies are also characterized by low productivity. Thus, it seems obvious to many policy makers that there must be a straight forward connection between productivity and unemployment.
Unemployment has call for a greater concern in Nigeria economy. It has continued to be the major macroeconomic objectives of the government. It constitutes a series of serious developmental problems and is increasingly more serious all over Nigeria. The major policy of the government and the international agencies is targeted at reducing unemployment. Since the population explosion begun, the developing nations have been characterized by unemployment.
Positive movement in the economy of a nation results in the economic wellbeing of the citizens. Jhingan (2005) points out that in the process of economic growth, it is customary to attach more importance to the accumulation of physical capital than human capital. These physical resources are forms ofcapital. But aside these tangible capital resources are human capital resources as an aggregate of education orschooling, training and health care delivery. These aggregation of human resource development can furtherincrease productivity, income, improve health and fitness, good habits in individuals such as being trustworthyand responsible.
1.2 Statement of the Problem
Given the significant impact of high-order human capital (such as business R&D staff in our case study) as well as the increasingly fast pace of technological change that makes human capital obsolete, a concerted effort needs to be made to facilitate its continuous development. It has been stressed that the differences in the level of socio-economic development across nations is attributed not so much to natural resources and endowments and the stock of physical capital but to the quality and quantity of human resources, Adebayo (1996).
However, the existing stock of human and physical capital in those regions with a high level of urban infrastructure does not lead to a high rate of economic growth.
According to Oladeji and Adebayo (1996), human resources are a critical variable in the growth process and worthy of development. They are not only means but more importantly, the ends that must be served to achieve economic progress. This is underscored by Harbinson (1973) who opined that “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 organizations, and carry forward national development. Clearly, a country which is unable to develop the skills and knowledge of its people and to utilize them effectively in the national economy will be unable to develop anything else”. Investment in human capital plays an important role in increasing competitiveness, improving quality of life of the population and in generating economic growth and development of a country. Currently, Nigeria wishes to be among twenty most developed countries in the world by year 2020. To give effect to this, one of the pre-requisites is to ensure that capable manpower is available in various areas of social, political, institutional, technological and economic endeavours which drive the process of growth, development and industrialization which will eventually guarantee the economic wellbeing of the nation. Consistent with the NEEDS programme of 2004, and the current Vision 20: 2020 development programme agenda, the country’s human resource development needs to be strengthened and stabilized in order to accelerate economic activities and trigger off higher productivity, wellbeing of the citizens in terms of income and economic growth and development. The nation’s aspiration to be in the league of 20 leading economies in the world by Year 2020 emerged on the realization that the endowment of Nigeria in material and human resources places her in good position to achieve this greatness. But the Human Development Report of UNDP (2008) shows that Nigeria is still at the low level of human development compared to countries in emerging economies. This is worrisome and poses a threat to 20: 2020 agenda. Education, as a measure for quantity, availability and human resource quality is the sole method which can be used to analyze the impact of human resource on economic growth (Benhabib and Spiegel, 1994).
1.3 Research Questions
1.4 Objectives of the Study
The main thrust of this study is on the impact of human capital development, unemployment and economic wellbeing on economic growth of Nigeria Others will be
1.5 Research Hypotheses
0
: There is no significant relationship between human capital development and economic wellbeing in Nigeria0
: There is no relationship between unemployment rate and economic wellbeing in Nigeria
1.6 Significance of the Study
The study will be of great importance to youths on embarking on entrepreneurial jobs rather than relying on pay jobs. It will also be of great importance to governments as the recommendations put forward will lead them alright in solving unemployment menace in Nigeria. The study will be useful to policy makers as it will redirect their policies towards the best ways to tackle unemployment in the country.The study will reveal to government the issues that hamper economic growth and ways of solving them at the early stage. It will be of great benefit to students who may wish to make research on human capital development, unemployment and its attendance effect on the economic wellbeing and growth of Nigerian economy. Scholars outside the scope of economics will benefits from the study as it unfolds the major issues with human capital development,unemployment in Nigeria, economic wellbeing and economic growth of Nigeria and possible ways of solving them.
1.7 Scope of the Study
This study is analytical focusing on the on human capital development, unemployment and economic wellbeing on economic growth of Nigeria. The study will major on human capital development, unemployment,economic growth and economic wellbeing of Nigerian. This research work will also be restricted to an extent, on the available data collected on the topic.