Abstract:
This work discusses the effect of human capital on labour productivity in manufacturing industries in Enugu and Anambra States. The study applied the ordinary least squares and the principal component Analysis in the estimation. The evaluation results show that human capital has a positive effect on the sectoral labour productivity level of the industry. Training, Education, Medicare and Research are strongly correlated with productivity. By all econometric standards the statistical evidence showed that the linear regression model was adequate and the Jargue Bera Statistic confirmed the fact. The principal componenant analysis adopted in the research revealed that Onitsha Aluminum manufacturing company has the highest impact of human capital. In the kmo and Bartlett’s Test conducted, all variables except Medicare extraction communalities are greater than 0.5, and component matrix shows that Training of all the components of human capital has the highest impact on labour productivity. Moreover, there are indications of under investment of human capital in some manufacturing industries. There is need to improve upon the level of investment and productivity of human capital so as to produce positive efficiency effect for productivity growth in the manufacturing industries
