International Journal of Academic Management Science Research (IJAMSR)   Year: 2019 | Volume: 3 | Issue: 2 | Page No.: 19-26 Direction of Causality between Human Capital Investment and Economic Growth in Nigeria: Lesson For Policy Makers ARANSI, Waliyi Olayemi Abstract: Abstract: The study examined the direction of causality between human capital investment and economic growth in Nigeria from 1981 to 2017. Secondary data on economic growth, government capital and recurrent expenditures on health and education which was sourced from Central Bank of Nigeria statistical bulletin (CBN) various issues were subjected to econometrics tools in sequential order of stationary test (Dickey-Fuller Generalised Least Square), Cointegration and Granger Causality tests. The empirical findings revealed that all variables are stationary of the same order that is integrated of order one 1(1) which necessitated the employment of Johansen Cointegration test so as to determine the long-run relationship but it was observed through both trace statistic and the maximum Eigen statistic that there was no cointegrating or long-run relationship between economic growth and human capital investment. Besides, in terms of direction of causality, on aggregate, unidirectional causality is observed which runs from economic growth to total government expenditure on human capital investment. On the other hand, at disaggregate level, unidirectional causality was noticed from economic growth to total recurrent expenditure on human capital and capital expenditure on human capital to economic growth respectively. Finally, there is unidirectional causality between total recurrent expenditure on human capital and total capital expenditure on human capital which runs from total capital expenditure on human capital to total recurrent expenditure on human capital. The study concluded that economic growth is expected to play a crucial role towards investment in human capital segment; that is, health and education, while policy recommendations comprised enforcement of due process during formulation and implementation of fiscal policy most especially expansionary fiscal policy towards health and education sectors, and policy aimed at not only reducing/eliminating human capital flight but also restricting receiving medical treatment abroad are put forward.