A Panel Data Modeling of the Impacts of Demographic Indicators on Human Development in Nigeria

Abstract

This study investigates the impact of demographic indicators on human development in
Nigeria using panel data modeling approach. The study employed annual panel data spanning
1994-2024 across the six geopolitical regions in Nigeria. The annual data was sourced from
National Bureau of Statistics (NBS), National Population Commission (NPC), Harmonized
Nigeria Living Standard Survey (HNLSS) and Nigerian Demographic and Health Survey
(NDHSS). The study employed descriptive statistics and normality measures, fixed effect
model, random effect model and diagnostic tests. The descriptive statistics showed that HDI
had the highest mean (347.01) and FLP had the lowest mean (98.60). The demographic
indicators are positively skewed and leptokurtic in nature. The demographic indicators are
not normal. The diagnostic tests revealed that random effect model is appropriate for
modeling the demographic indicators in Nigeria and the presence of autocorrelation must be
addressed to ensure valid inference. The study revealed that fertility rate (FR), urbanization
rate (UR) and dependency ratio (DR) had negative impact whereas life expectancy at birth
(LEB) and Female Labour participation (FLP) had positive impact on human development in
Nigeria. The fixed and random effect model showed that 97.14% and 85.43% respectively of
the variations in human development were explained by the demographic indicators
(explanatory variables). The study concludes that LEB and FLP are important drivers of
human development whereas FR, UR and DR hinders the growth of human development in
Nigeria within the studied period. Based on the findings, It was recommended that
government should prioritize healthcare financing, maternal and child health services, and
policies enabling women’s employment as life expectancy at birth and female labour force
participation had positive impact on HDI. The software for estimation is E-Views.