Effect of Public Expenditure in Construction and Transportation sectors on Employment in Nigeria

Abstract

This paper examined public expenditure and employment in Nigeria from 1980 to 2017. The study was induced by the insufficient federal government budgetary allocations to some critical sectors such as transport and construction sectors that tend to prompt the decay in the construction sector. To this end, the objectives of the study are to evaluate the effect of public expenditure in construction and transport sectors on employment rate in Nigeria. In doing this time series data were collected from CBN bulletin from 1980-2017 on variables such as employment rate, public expenditure on construction and transportation sectors. The cointegraton and ECM methods were used for the analysis. The long run dynamic results showed that there exists a long-run relationship or equilibrium among the variables. The coefficient of ECM is negatively signed and statistically significant at 5 percent level. Meaning that the short run error has been adjusted to long run equilibrium relationship. The result of analysis showed that in the long run, government expenditure will address the pitfalls in the country employment. Therefore, the paper recommended that effort should be made to ensure viability of social infrastructure through increase in annual capital budget spending in order to increase the level of employment and hence economic growth in Nigeria.