Modeling the Impacts of Demographic Indicators on Human Development in Nigeria: A Fully Modified Ordinary Least Square (FMOLS) Regression Approach

The aim of this study is to model the impact of demographic indicators on human development in Nigeria using Fully Modified Ordinary Least Square (FMOLS) regression. The study employed annual panel data covering 1994-2024 (30 years) in Nigeria. The annual data was sourced from National Bureau of Statistics (NBS) and National Population Commission (NPC). The panel unit root test (LLC) revealed that the variables were non-stationary at levels, I(0) and stationary at first difference, I(1). The Pesaran cross-sectional dependence (CD) test showed the presence of cross-sectional dependence among the variables indicating interdependence in the dataset. The Fisher statistics showed that there exists more than one cointegrating relationship among the variables in the study. AIC, BIC, HQC, and FPE all attain their minimum at Lag 3, confirming Lag 3 as the optimal lag length for the Panel VAR. The FMOLS showed that Life expectancy at birth (LLEB) exerts a positive and significant impact on human development (β = 0.2146, p < 0.01), indicating that improvements in life expectancy contribute positively to human well-being. Urbanization rate (LUR) showed negative and highly significant effects (β = -0.4509 and -0.3261, respectively; p < 0.01), suggesting that higher urbanization reduce the level of human development. Dependency ratio (LDR) also carried a negative and significant coefficient (β = -0.0709, p < 0.05). The explanatory variables jointly account for about 94% of the long-run variations in human development in Nigeria