DO DIASPORA REMITTANCES CONTRIBUTE TO HUMAN CAPITAL DEVELOPMENT IN NIGERIA?

Abstract

This study investigates the impact of diaspora remittance inflow on human capital development (HCD) in Nigeria by adopting improvements in health and education as metrics for HCD. Using the Autoregressive Distributive Lag (ARDL) model and bounds testing approach on data from 1980 to 2021, the results indicate that remittance inflow have a positive effect on HCD in Nigeria. The study discovered that remittances have a negative and substantial link with infant mortality rate i.e., remittance inflow substantially reduce infant mortality rate. Also, remittance have a positive relationship with life expectancy, particularly in the short-run. Additionally, remittances were found to have a positive relationship with school enrollment rates. Although remittances proved to play a role in improving HCD in Nigeria, the study recommends that families receiving remittance inflow should not become overly reliant on it by working less as this has the potential to stifle labour supply and slowdown economic growth.   Key words: Diaspora Remittances, Human capital development, ARDL, Bounds Test. JEL Classification: D64, F22, O15, J24.