Abstract

This study investigated the impact of government education expenditure on primary school enrolment in Nigeria by applying the bounds testing (ARDL) approach to cointegration for the period of 1970 to 2017. The model was constructed to identify the relationship between the two variables while also considering the interaction with control variables; per capita income, remittances, investment and population growth. The bounds tests suggest that the variables of interest are bound together in the long-run when primary school enrolment is the dependent variable. Interesting observations were made which are explained by government low spending on education. It was observed that an insignificant relationship exists between government education expenditure on primary school enrolment while a positive relationship exists between remittances and primary school enrolment. Population growth has positive relationship in the short run, but a negative relationship in the long run. The speed of adjustment to equilibrium is 88% within a year when the variables wander away from their equilibrium values. The study recommends that government policies directed at improving the expenditure towards education should largely increase, and money meant for the education sector should be disbursed with high degree of transparency.

Key words: Autoregressive distributed lag, error correction, government education expenditure, primary school enrolment, remittances.