[solely on Lesotho]

by

Chapter 1: Introduction

The concept of investment in human capital is of recent origin. Jhingan (2005) points out that in the process of economic growth, it is customary to pay more attention to the accumulation of physical capital than human capital. New theories of endogenous growth, thus significantly to the introduction of the active role of human capital in economic development. Human capital is a term economists often use for education, health and other human capabilities that can improve performance has increased (Todaro and Smith, 2003). Health and education are two closely related components of human capital, which work together to make a person more productive.

With one component more important than others is unrealistic, as more than an educated person who is ill, so as ineffective as an illiterate, but a healthy person. Both components are thus related to each other because of their close relationship. Appleton and Teal (1998), describe the health and education as components of human capital, which contribute to human welfare. They describe these components in contrast to other types of goods produced in society. Although higher income may be conducive to health, he can not be directly acquired as material goods and services. Health and education are often subsidized by the state, and in some countries, education is compulsory for a minimum period of time.

Nigeria, which is one of the richest 50 countries in the early 1970's retrogressed to become one of the 25 poorest countries on the eve of the twenty-first century. Faith in human capital as the need for growth has begun in Nigeria in the implementation of the Development Plan 1955-60 and today, the importance of knowledge in the economy, human capital is increasingly attracting both academic and social interests.

The purpose of this study is to examine the role of education and health investments in human capital and how it can translate into economic development of countries like Nigeria.

Chapter 2: Literature Review

Economists do not always recognize the health component of human capital. Schultz (1961) saw human capital as the resources that are inherent in every person who could be traded between users and owners to improve their respective conditions of life. He outlined these inherent resources in human beings involves knowledge (knowing what to do), skills (ability to do what must be done), and attitude (behavioral demonstration of a favorable inclination at this what should be done). No mention here of health. Barro (1991) conducted a study on the impact of human capital on economic growth. His study was based on data sets relating to a variety of countries. He has a narrow stream of human capital, such as the number of children in schools at primary and secondary education. Human capital can thus be viewed in two ways: the narrow sense, which deals only with education, or more broadly, which adds to the health education component. It has become commonplace to discuss human capital in its narrow sense, since the costs of education and training is able to measure compared ...