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The Impact of Unemployment on Economic Growth in Nigeria: An Application of Autoregressive Distributed Lag (ARDL) Bound Testing

Author

Listed:
  • Akutson Seth

    (Entrepreneurship Research and Development Centre, Kaduna State University, Kaduna, Nigeria)

  • Messiah Abaka John*

    (Entrepreneurship Research and Development Centre, Kaduna State University, Kaduna, Nigeria)

  • ARAF Yakubu Dalhatu

    (Central Bank of Nigeria, Central District Area, Abuja)

Abstract

This study examined the relationship between unemployment and economic growth in Nigeria. It also determines the effects of unemployment on economic growth in Nigeria. These were with the view to analyze the impact of unemployment on economic growth and proffer recommendations towards enhancing economic growth and reducing unemployment in Nigeria in this present time economic challenges. Annual secondary data sourced from the Central Bank Statistical Bulletin and National Bureau of Statistics covering the period 1986 to 2015 were used. Data collected include unemployment rate and growth rate of Gross Domestic Product. Data collected were analyzed using the ARDL Bound Testing and the Parsimonious Error Correction Model (ECM) of the ARDL Model to test the relationship and analyzed the effect respectively. The findings showed that there is no long- runs relationship between unemployment rate and Economic growth in Nigeria; although, with effective policies, the long-run increase in unemployment has a growth enhancing mechanism on economic growth which is statistically significant (t=3.748221, p

Suggested Citation

  • Akutson Seth & Messiah Abaka John* & ARAF Yakubu Dalhatu, 2018. "The Impact of Unemployment on Economic Growth in Nigeria: An Application of Autoregressive Distributed Lag (ARDL) Bound Testing," Sumerianz Journal of Business Management and Marketing, Sumerianz Publication, vol. 1(2), pages 37-46, 05-2018.
    • Handle: RePEc:sum:sjbmms:2018:p:37-46
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    References listed on IDEAS

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    1. M. Hashem Pesaran & Yongcheol Shin & Richard J. Smith, 2001. "Bounds testing approaches to the analysis of level relationships," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(3), pages 289-326.
    2. Lee, Jim, 2000. "The Robustness of Okun's Law: Evidence from OECD Countries," Journal of Macroeconomics, Elsevier, vol. 22(2), pages 331-356, April.
    3. Derek Yu & Rochelle Beukes & Simba Murozvi & Tina Fransman, 2016. "Underemployment in South Africa," Working Papers 55, Economic Research Southern Africa.
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    Cited by:

    1. Richardson Kojo Edeme & Ekene ThankGod Emeka & Jonathan Emenike Ogbuabor, 2024. "Global Uncertainty, Climate Change and the Unemployment-Economic Growth Relationship in Nigeria," Journal of Development Policy and Practice, , vol. 9(2), pages 238-256, July.
    2. Salyha Zulfiqar Ali Shah & Mah Rukh Shabbir & Sabiha Parveen, 2022. "The Impact of Unemployment on Economic Growth in Pakistan: An Empirical Investigation," iRASD Journal of Economics, International Research Alliance for Sustainable Development (iRASD), vol. 4(1), pages 78-87, March.
    3. Karikari-Apau, Ellen & Abeti, Wilson, 2019. "The Impact of Unemployment on Economic Growth in China," MPRA Paper 96100, University Library of Munich, Germany.

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    Keywords

    Unemployment; Economic growth.;

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