EFFECT OF FORMAL EDUCATION ON POVERTY REDUCTION IN NIGERIA

Abstract

This study analyzes the impact of formal education on poverty reduction in Nigeria by studying the relationship between government expenditure on education, school enrolment, and labour force participation. It uses 30 years of annual time series data and employs various statistical methods, such as OLS regression, ADF test, Philip Peron unit root test, F-tests, and t-tests. Labour force participation serves as a proxy to understand how these macroeconomic variables affect poverty. The findings reveal that both school enrolment and government expenditure on education significantly affect labour force participation. Specifically, enrolment in secondary and tertiary education positively correlates with increased labour force participation. To enhance poverty reduction in Nigeria, the study proposes improving the effectiveness of government expenditure, enhancing access to quality secondary and tertiary education, fostering collaboration between education and businesses, and emphasizing vocational and technical education aligned with the labour market’s needs.

Keywords

• school enrolment, government expenditure, poverty, labour force participation, adf model