Abstract
The paper examines the determinants of unemployment in Nigeria from 1981 to 2013, using error correction model (ECM), and with ordinary least squares method for robustness check.
Highlights
The statistic on unemployment rate is one of the most prominent indicators of how well an economy is performing because of the perceived difficulty to finding a job, especially during periods of recession
The study finds that output size, foreign direct investment, exchange rate depreciation, and trade openness curb labour unemployment in Nigeria, while factors that worsen labour unemployment include financial development, intensive capacity utilisation, and natural resource rent
This calls for intensified efforts at financial sector liberalization drive to broaden the financial system, improve institutional quality, and adopting economic diversification strategy to reduce structural misalignments and attain a nondeclining inclusive growth in Nigeria
Summary
The statistic on unemployment rate is one of the most prominent indicators of how well an economy is performing because of the perceived difficulty to finding a job, especially during periods of recession. In Nigeria, for example, of the vast increases in population growth annually, it has been observed that unemployment rate has continually maintained an upward trajectory, especially since year 2001. It averaged 14.7% and 18.5% for 2001 - 2010 and 2011 - 2013 periods, respectively, from an average of less than 6% in 1981 to 2000 periods. Most economic indicators for the period rose relatively, including capacity utilization rate, real GDP, FDI and government expenditure.
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