THE IMPACT OF GLOBALIZATION ON HUMAN CAPITAL DEVELOPMENT IN NIGERIA (1990-2023)
Abstract
This research work seeks to analyze the impact of globalization on human capital development in Nigeria, using secondary time series data sourced from WDI, UNDP, KOF and CBN covering the period of 1990 to 2023. The objective of this study is to check the trend of globalization and human capital development, examine the direction of causality and to investigate their relationship. The test for stationarity was carried out using Augmented Dickey-Fuller and Philip Perron Unit root test and the result indicates that the variables are of mixed order, which justifies the adoption of Autoregressive Distributed Lag (ARDL) model to determine the short run and long run relationship among the variables. Consequently, ARDL Bounds cointegration test was employed to check for the existence of long run relationship. The short run ARDL revealed a negative impact of globalization on HCD, while trade liberalization (TRLIB) and GDP demonstrate positive and significant effects. The long run ARDL model revealed that only GDP shows a statistically significant positive relationship with HCD, indicating that sustained economic growth is essential for enhancing human capital. The study also highlights that foreign direct investment (FDI) and remittances, although potentially beneficial, do not significantly contribute to HCD in the short run. The Engle Granger causality tests indicate that HCD is influenced by remittances, while GDP influences FDI, but no causality exists between TRLIB and GDP or HCD and FDI. The results suggest that Nigeria must strengthen its education, health, and skills development systems to fully leverage globalization. It is therefore recommended that government should increase investment in education and health, the implementation of frameworks to support local job creation, and redirect FDI and remittances towards human capital initiatives. Overall, the findings emphasize the need for targeted policies to optimize the potential of globalization and investment in fostering sustainable human capital development in Nigeria.
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