Abstract
The study investigated the association between employment dynamics and fiscal policy in Economic Community of West African States (ECOWAS). The study focused on the 15 memberships of ECOWAS from 1990 to 2019. ?h? study made use of Keynes’ theory, from which a simple model was formed. The variables used in the model were employment, government expenditure, and tax revenue. ?ut?r?gr?ss?v? d?str?but?d l?g (?RDL) was adopted because of the nature of the unit root test. The result of the paper showed that in the long-run, both government expenditure and tax revenue are significant in determining employment level in ECOWAS; government revenue has a negative significant effect on employment and tax revenue has a positive significant effect on employment. The study recommended that only tax revenue can boost employment levels in ECOWAS countries. Therefore, the government should make use of tax revenue to create more employment rather than using government expenditure, which has not been productivity over time. Key words: Employment dynamics, fiscal policy, autoregressive distributed lag (ARDL) approach.
Highlights
The governments of several nations give prominence to the employment situation of their citizens
In the light of the above, this study will contribute to the existing debate on the nexus between employment dynamics and fiscal policy in Economic Community of West African States (ECOWAS)
The result indicates that both government expenditure and tax revenue are significant in determining employment level in ECOWAS in the long-run, but government revenue has a negative significant effect on employment and tax revenue has a positive significant effect on employment
Summary
The governments of several nations give prominence to the employment situation of their citizens. Formal employment increases public finances via more revenues and the creation of more stable and productive jobs Country preferences, such as the choice between work and leisure, do matter, and various policy goals may compete. The literature does not address the issues of how both tax revenue and government expenditure affect the dynamics of employment which is the major focus of this study. In the light of the above, this study will contribute to the existing debate on the nexus between employment dynamics and fiscal policy in Economic Community of West African States (ECOWAS). Based on the journal examined, this study is novel as it looks at the effect of both tax revenue and government expenditure on employment dynamics in ECOWAS countries.
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