European Journal of Business and Management www.iiste.org ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online) Vol 3, No.9, 2011 29 | Page www.iiste.org Human Capital Development and Economic Growth in Nigeria Adelakun, Ojo Johnson Department of Economics, Joseph Ayo-Babalola University, Ikeji-arakeji, Osun State, Nigeria. joadelakun@yahoo.co.uk Abstract Human capital is an important factor used in converting all resources to mankind’s use and benefit. Economists observed that the development and utilization of human capital is important in a nation’s economic growth. However, the illiteracy rate in Nigeria is high and many workers are unskilled, leading to their low productivity; hence, this study shows the relevance of human capital development to the growth of the economy. It evaluates human capital development and economic growth in Nigeria by adopting conceptual analytical framework that employs the theoretical and ordinary least square (OLS) to analyze the relationship using the GDP as proxy for economic growth; total government expenditure on education and health, and the enrolment pattern of tertiary, secondary and primary schools as proxy for human capital. The analysis confirms that there is strong positive relationship between human capital development and economic growth. Following the findings, it was recommended that stakeholders need to evolve a more pragmatic means of developing the human capabilities, since it is seen as an important tool for economic growth in Nigeria. Also proper institutional framework should be put in place to look into the manpower needs of the various sectors and implement policies that will lead to the overall growth of the economy. Keywords: Human capital, Economic growth, Education, Productivity, Youth empowerment Introduction The major source of per capital output in any country; whether developing or developed, with a market economy or centrally planned is an increase in productivity. Per capita output growth is however an important component of economic welfare, (Abramowitz, 1981). From experience, it has been revealed that human beings are the most important and promising source of growth in productivity and economic growth. Equipment and technology are products of human minds and can only be made productive by people. The success of any productive program depends on human innovative ideas and creativity. The impact of human capital development 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