IMPLICATIONS OF GOVERNMENT EXPENDITURE ON EDUCATION AND HEALTH ON LABOUR PRODUCTIVITY

One of the numerous responsibilities of the government of any country is to invest in the various sectors of the economy. This should however be channeled to the appropriate sectors, such as the education and health sectors, that will lead to a continual growth in the economy of the country. It is in the light of this, that this study looks at government spending on education and health and its effect on the economic growth of Nigeria. Health is central to the well being, and education is essential and satisfying for a rewarding life. This study made an attempt to provide empirical evidence of the impact of government spending on education and health on labour productivity in Nigeria. This study made use of econometric methods to determine the relationship between education, health and labour productivity. The regression results, however, showed that capital and recurrent expenditure on health as well as recurrent expenditure on education have a positive impact on labour productivity while capital expenditure on education has little or no impact on lab our productivity in Nigeria. This study, however, recommends that the government should increase its budgetary allocation to the education sector and give autonomy to private sectors to set up more schools due to the unreliability of government funds. Keywords: Government expenditure, education, health and labour productivity.