THE PARADOX OF JOBLESS GROWTH AND HUMAN CAPITAL

A CAUSAL AND STRUCTURAL ANALYSIS OF NIGERIA’S ECONOMIC DEVELOPMENT PATH (1980–2024)

Abstract

This study investigates the paradox of jobless growth and diminishing returns to human capital in Nigeria between 1980 and 2024. Despite sustained GDP growth and significant public investment in education and health, Nigeria continues to experience high unemployment, low labour productivity, and weak human development outcomes. These trends challenge established human capital and endogenous growth theories. Employing an Autoregressive Distributed Lag (ARDL) model with time-series data, the analysis reveals a positive relationship between unemployment and economic growth, thereby empirically confirming the jobless growth
phenomenon. Although short-term human capital expenditures yield positive effects, their longterm impacts are negligible or negative, suggesting systemic inefficiencies and pronounced skills mismatches. The study argues that these outcomes stem not from inadequate investment, but from structural factors embedded in Nigeria’s rentier-state political economy. In this context, oil revenues disrupt the fiscal relationship between the state and citizens, distort economic incentives, and sustain enclave-driven, capital-intensive growth that generates limited  employment. The findings underscore the need for comprehensive structural reforms and for adopting strategic, quality-focused human capital policies to address jobless growth and foster inclusive development.