Government Education Spending and Education Outcome in Nigeria
International Journal of Economics, Finance and Management Sciences
Volume 4, Issue 4, August 2016, Pages: 223-234
Received: Jul. 14, 2016; Accepted: Jul. 25, 2016; Published: Aug. 6, 2016
Views 20134      Downloads 662
Charles Uchenna Obi, Department of Economics, Nnamdi Azikiwe University, Awka, Nigeria
Sylvester Chukwunonso Ekesiobi, Department of Economics, Chukwuemeka Odumegwu Ojukwu University, Igbariam, Nigeria
Stephen Kelechi Dimnwobi, Department of Economics, Nnamdi Azikiwe University, Awka, Nigeria
Emilia Mukosolu Mgbemena, Department of Economics, Chukwuemeka Odumegwu Ojukwu University, Igbariam, Nigeria
Article Tools
Follow on us
Expenditure on education is regarded as investment in human capital because it helps in skill formation and thus raises the ability to work and produce more. Government education spending is of great importance to national development and plays a critical role in promoting growth and knowledge deepening. This paper examines government education spending and education outcome in Nigeria from 1970 – 2013. Employing Augmented Dickey Fuller (ADF) unit root test and Ordinary Least Square (OLS) technique, the study revealed that public education spending has a positive and significant effect on education outcome in Nigeria. Public health expenditure and urban population growth were also found to have positive effects on education outcome but are non significant in determining education outcome. The study recommends among other things, that government should spend more on education which needs to be targeted for the desired effects to be realized. Again government should monitor spending given the history of corruption and embezzlement of public funds in Nigeria.
Government Spending, Education Outcome, Economic Development
To cite this article
Charles Uchenna Obi, Sylvester Chukwunonso Ekesiobi, Stephen Kelechi Dimnwobi, Emilia Mukosolu Mgbemena, Government Education Spending and Education Outcome in Nigeria, International Journal of Economics, Finance and Management Sciences. Vol. 4, No. 4, 2016, pp. 223-234. doi: 10.11648/j.ijefm.20160404.18
Copyright © 2016 Authors retain the copyright of this article.
This article is an open access article distributed under the Creative Commons Attribution License ( which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
Adowaa, B. (2014). Does public expenditure management matter for education outcomes? Development Southern Africa, 31 (4), 535–552.
Barro, R. (1998). Human capital and growth in cross-country regressions. Technical Report Mimeo. Harvard University.
Barro R. J., & Sala-i-Martin, X. (1995). Economic Growth. New York: MacGraw-Hill.
Becker, G. S. (1964). Human capital: A theoretical and empirical analysis with special reference to education. Chicago: The University of Chicago Press.
Becker, G. (1975). Human capital. Chicago: Chicago University Press.
Bowen, H. R. (1943). The interpretation of voting in the allocation of economic resources, the quality. Journal of Economics, 28 (1), 27-48.
Card, D. (1999). The casual effect of education on earnings. In O. Ashenfelter and D. Crad (eds) Handbook of labour economics, 3, North-Holland, Amsterdam, 1801-63.
Central Bank of Nigeria (2003). Annual report and statement of account, Abuja, Nigeria.
Cunha, F., & Heckman, J. (2009). The economics and psychology of inequality and human development. NBER Working Papers 14695.
Das, J., Dercon, S. Habyarimana, J. Krishnan, P. Muralidharan, K. & Sundararaman, V. (2013). School inputs, household substitution and test Scores. American Economic Journal: Applied Economics, 5 (2), 29–57.
Dauda, R. (2011). Effect of public educational spending and macroeconomic uncertainty on schooling outcome: Evidence from Nigeria. Journal of Economics, Finance and Administrative Science, 16 (31), 7–21.
De la Fuente, A., & Ciccone, A. (2002). Human capital in global economy knowledge. Report to the Commission Europe, Brussels.
De la Fuente, A., & Ciccone, A. (2003). Human capital and growth in a global and knowledge-based economy. European Commission, DG for Employment and Social Affairs. Office for official publications of the European Communities, Luxembourg.
De la Fuente, A. (2004). Education and growth: An overview. Institute of economic analysis. CSIC, October.
Dustmann, C., & Micklewright, J. (2001). Intra-household transfers and the part time work of children. CEPR Discussion Paper 2796.
Ebejer, I., & Ulrike, M. (2009). The efficiency of public expenditure in Malta. Economic Analysis from the European Commission’s Directorate General for Economic and Financial Affairs, 6 (2)
Edame, G. E., & Eturoma, A. D. (2014). The determinants of public expenditure on educational infrastructural facilities and economic growth in Nigeria. Journal of Business Management and Economics, 5 (6), 152-161.
Ferguson, R. (1991). Paying for public education: New evidence on how and why money matters. Harvard Journal on Legislation, 28, 465–98.
Ferguson, R., & Ladd, H. (1996). Additional evidence on how and why money matters: A production function analysis of Alabama Schools. In Holding schools accountable: Performance-based reform in education, ed. H. F. Ladd, 265–98. Washington, DC: Brookings Institute.
Gupta, S., Verhoeven, M., & Tiongsan, E. (1999). Does Higher spending buy better results in education and health care? Washington, D. C.: International Monetary Fund.
Gupta, S. & Verhoeven. M (2001). The efficiency of government expenditure. Experiences from Africa. Journal of Policy Modelling, 23, 433-67.
Gupta, S., Verhoeven, M., & Tiongsan, E. (2002). The effectiveness of government spending on education and health care in developing and transition economics. European Journal of Political Economy, 18 (4), 717-737.
Gupta, S., Schwartz, G., Tareq, S. Allen, R., Adenauer, I., Fletcher, K. & Last, D. (2007). Fiscal management of Scale-Up aid. Washington: International Monetary Fund.
Gurgand, M. (2003). Farmer education and the weather: Evidence from Taiwan (1976-1992). Journal of Development Economics, 71 (1), 51-70.
Hanushek, E. (1986). The economics of schooling: Production and efficiency in publicschools. Journal of Economic Literature 24, 1141–77.
Hanushek, E. (1996). School resources and student performance. In Does money matter: The link between schools, student achievement and adult success, ed. G. Burtless, 43–73. Washington, DC: Brookings Institute.
Hill, M. & King, E. (1991). Women education in the third world: An overview. In E. M. King & M. A. Hills (eds.) Women Education in Developing Countries: Barriers, Benefits and Policy. Washington, D. C: The World Bank.
Jackson, C. K., Rucker C., & Persico, C. (2015). The effects of school spending on educational and economic outcomes: Evidence from school finance reforms. NBER Working Paper No. 20847.
James, E., King, E. & Suryadi, A. (1996). Finance, management, and costs of public and private schools in Indonesia. Economics of Education Review, 15 (4), 387-98.
Jayasuriya, R., & Wodon, Q. (2003). Efficiency in reaching the millennium development goals. World Bank Working Paper No. 9.
Jiangyi, Q. (2016). Government education expenditure, third-party spillover effect and economic growth in China. Journal of Sustainable Development, 9 (2), 145–152.
Lindauer, D. L., & Velenchik, A. D. (1992). Government spending in developing countries: Trends, causes and consequences. The World Bank research observer, 7 (1), 59-78.
Lucas, S. (1988). The mechanics of economic development. Journal of Monetary Economics, 3-42.
McMahon, W. (1999). Education and development, measuring the social benefits. New York: Oxford University Press.
Mincer, J. (1958). Investment in human capital and personal income distribution. Journal of Political Economy, 66 (4), 281-302.
Mincer, J. (1993). Investment in U. S. education and training. Paper presented at the International conference on Human Capital Investments and Economic Performance at Santa Barbara, November 17-19, 1993.
Mingat, A., & Tan, J. (1992). Education in Asia: A comparative study of cost and financing. Washington, D. C: World Bank.
Moock, P. R., & Jamison, D. T. (1988). Educational development in sub-Saharan Africa. Finance and Development, 25 (1), 22-24.
Mussagy, I. H., & Babatunde, M. A. (2015). Government spending on education and economic growth in Mozambique: A cointegration approach. Revista Electrónica de Investigaçãoe Desenvolvimento, 5, 1-18.
Mukherjee, A. N. (2007). Public expenditure on education: A review of selected issues and Evidence. Retrieved from
Musgrave, R. & Musgrave, P. (1989). Public finance in theory and practice (5th ed). New York: McGraw-Hill International Editions, Finance Series.
Nelson, R. & Phelps, E. (1996). Investments in humans, technological diffusion and economic growth. American Economic Review, 56, 69-75.
Obi, Z. C., & Obi, C. O. (2014). Impact of government expenditure on education: The Nigerian experience. International Journal of Business and Finance Management Research, 2, 42-48.
Odo, S. I., Nwachukwu, J. O., & Agbi P. E. (2016). Public expenditure on social capital: Implications for economic growth in Nigeria. Journal of Economics and Sustainable Development, 7 (6), 72-79.
OECD/UIS (2003), Financing education - Investments and returns. Analysis of the World Education Indicators 2002 Edition.
OECD/UIS (2006), Education counts: Benchmarking progress in 19 WEI Countries. World Education Indicators.
Ogbu, O. & Gallagher, M. (1991). Public expenditures and health care in Africa. Social Science and Medicine, 34 (6), 615-624.
Okeke, B. C. (2014). Impact of public sector spending on health and education outcomes in Nigeria. An M. sc dissertation submitted to the department of Economics, University of Nigeria, Nsukka.
Okonkwo, S. C. (2014). Perception of parents on over schooling of children at the preprimary education in Onitsha. A thesis submitted to the department of education foundations, faculty of education, university of Nigeria, Nsukka.
Olayemi, S. O. (2012). Human capital investment and industrial productivity in Nigeria. International Journal of Humanities and Social Science, 2 (16), 298 – 307.
Omotor, D. (2004). An analysis of federal government expenditure in the education sector of Nigeria: Implications for national development. Journal of Social Sciences, 9 (2), 105-110.
Onwioduokit E. & Tule, M. (2002). Options for Sustainable Funding of Education in Nigeria. In Ozoesan, & G. Evbuomwan (Eds.) Human Resources Development in Africa. Conference Proceedings of the Nigerian Economic Society (pp. 523-550). Ibadan, Nigeria.
Palomba, C. A., & Banta, T. W. (1999). Assessment essentials: Planning, implementing, and improving assessment in higher education. San Francisco: Jossey-Bass.
Peacock, A. & Wiseman, J. (1967). The growth of public expenditure in the UK. Princeton, USA: Princeton University Press.
Psacharopoulos, G., & Patrinos, H. (2004). Returns to investement in education: A further update. Retrieved from 134.htm.
Romer, P. (1986). Increasing returns and long run growth. Journal of Political Economy, 12-37.
Romer, P. (1990). Endogeneous technical change. Journal of Political Economy, 98, S 71- S 102.
Schady, N. (2002). The (Positive) effect of macroeconomic crises on the schooling and employment decisions of children in a middle-income country. Development Research Group: The World Bank.
Schultz, T. W. (1971). Investment in Human Capital. New York: Free Press.
Sen, A. (1999). Development as freedom. Oxford, UK: Oxford University Press.
Sianesi, B., & Van Reenen, J. (2003). The returns to Education: Macroeconomics. Retrieved from
Solow, R. (1956). Technical change and the aggregate production function. Review of Economics and Statistics, 39, 312-320.
Todaro, M. P., & Smith, S. C. (2009). Economic development. England: Pearson Education Limited.
Torruam, J. T., Chiawa, M. A., & Abur, C. C. (2014). Cointegration analysis of public expenditure on tertiary education and economic growth in Nigeria. CBN Journal of Applied Statistics, 5 (2), 137–146.
Ude, D., & Ekesiobi, S. (2014). Panel investigation of states social spending and social outcome: Perspective of education in Nigeria. International Journal of Economics, Finance and Management 3 (5), 244–255.
Woessmann, L. (2006). Efficiency and equity of European education and training policies. CESifo Working Paper Series No. 1779.
World Bank. (1980). World Development Report. Washington, D. C.: World Bank.
World Development Indicators (Various Years).
Science Publishing Group
1 Rockefeller Plaza,
10th and 11th Floors,
New York, NY 10020
Tel: (001)347-983-5186