Labour Productivity and Health Capital in Nigeria: The Empirical Evidence

Abstract

This paper attempts to analyze the labour productivity effects of health capital in Nigeria. The GMM methodology was adopted in the estimation having tested for unit root and possible co-integration. We find that health capital investment is a significant determinant of labour productivity. Evident from the hypotheses the null hypothesis of an insignificant impact of health capital investment on labour productivity in Nigeria is vehemently invalidated on the basis of a significant Wald coefficient. The analysis indicates that health capital investment enhances productivity of the labour force. Given that Nigeria is a highly labour-intensive economy, importance must be accorded to having a healthier workforce in order to maximize productivity. Another essential finding in the study lies in the statistical significance of the education-labour and health capital-labour interaction terms. The Nigerian government has to build capacity through investment in education in order to enhance productivity of the labour force. This would protect the economy from further negative trends in productivity growth.