The Impact of Health on Labour Productivity in Nigeria From 1970 to 2012, Applying the Standard Neo-Classical Growth Framework

Abstract

This study estimates the impact of health on labour productivity in Nigeria from 1970 to 2012, applying the standard neo-classical growth framework. Using Ordinary Least Square (OLS) technique, Cointegration and Granger Causality test procedures, the Unit root test result shows that five of the variables, PERCAPITA, LABFORCE, EDUCATIO, AGRICULT and HEALTH are not stationary at level (order zero) except INVEST indicating no propensity for the variables to move together towards equilibrium. The cointegration test procedures conducted indicates at most three cointegrating equations. The causality test result conducted indicates a unilateral causality from LABFORCE to PERCAPITA, PERCAPITA to HEALTH, PERCAPITA to EDUCATIO and PERCAPITA to AGRICULT. The result table also shows no direction of causality between PERCAPITA and INVEST. The OLS test result shows that the empirical evidence strongly indicates that healthy-labour force is one factor that determines productivity. Statistically, the result shows that the independent variables explain the dependent variable to the tune of 90 %. The t-values of the variables LABFORCE, EDUCATIO, and AGRICULT are statistically significant while others are not. The stability and residual diagnostic tests results indicates that the CUSUM and CUSUMSQ test results reveal satisfactory plot of the recursive residuals at the 95 percent significance level. The study therefore recommends that the Federal Governments as well as the authorities in every states of the country must focus on the improvement of labour productivity in order to raise the standard of living of the people in Nigeria. JEL CLASSIFICATION: C12, C51, J24, I12, N3, N37

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Author Information
Ephraim Ikechukwu Ugwu, Federal University,Oye-Ekiti, Nigeria
Yakubu Suleiman, Kogi State University, Anyangba, Nigeria

• Category: Economics I – Health, Education, and Welfare

Posted by James Alexander Gordon

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