The study examined the determinants of human capital formation with evidence from Nigeria. Specifically, the study sought to examine how these determinants affect human capital formation; and how they affect the growth of the Nigerian economy. The theoretical foundations of the study were the views of Adam Smith, Theodore Schultz, Gary Becker and Jacob Mincer on human capital. The data used in the study were expenditures on education, expenditures on health, total enrolments (primary, secondary, and tertiary), mortality rate, life expectancy and GDP of Nigeria. The study used trend diagrams, tabular analysis and descriptive statistics to provide answers to the first question; and the second question was answered using the three-stage least squares (3SLS) econometric technique. It was discovered that bi-directional positive and significant relationships existed between health expenditures and economic growth. Mortality rate had a positive relationship with expenditures on health. Also, bi-directional negative and significant relationships existed between education expenditures and economic growth, even when there were increased expenditures on education over the years. Total enrolments positively affected education expenditures. It was concluded that expenditures on education had not been sufficient in revitalizing the education sector. This has resulted to negative consequences in determining effective and efficient human capital formation in the economy. It was recommended that expenditures on health should be increased to ensure positive contributions to human capital formation; and government should focus on revitalizing the education sector, through effective and transparent spending, so as to have positive effects on human capital formation and the economy.
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Ubi-Abai Itoro Praise (2018) studied this question.