Empirical Analysis of the Relationship Between Public Expenditure on Education and Human Capital Development in Nigeria (2010-2023)

This study empirically analyses the relationship between public expenditure on education and human capital development in Nigeria from 2010 to 2023. While successive Nigerian governments have articulated commitments to education investment as a driver of human capital formation, the empirical evidence linking budget allocations to measurable human capital outcomes remains insufficient for robust policy inference. Drawing on endogenous growth theory and human capital theory, as well as recent empirical studies on education spending and outcomes in sub-Saharan Africa from 2019 to 2024, the study employs a quantitative research design using longitudinal panel data. Secondary data are sourced from the World Bank, National Bureau of Statistics, and Federal Ministry of Education annual reports. An autoregressive distributed lag bounds testing approach is applied to examine both short-run and long-run relationships between education expenditure variables and human capital outcome proxies including net enrolment ratios, literacy rates, and the human development index score. The study expects to find a significant positive but lagged effect of capital education expenditure on human capital indicators, while recurrent expenditure effects are less robust. Specific gaps in the literature regarding the expenditure-outcome transmission mechanism, including teacher quality, governance, and geographic equity, are addressed. Findings will contribute to the empirical evidence base for education finance reform in Nigeria and provide analytical tools applicable to state-level human capital policy. Keywords: education expenditure, human capital, panel data, Nigeria, ARDL model