Fiscal Policy and Employment Dynamics in Nigeria
Abstract
This paper set out to investigate the effect of fiscal policy on employment dynamics in Nigeria between the periods 1991 to 2020 using secondary data sourced from the Central Bank of Nigeria statistical bulletin. The Augmented Dickey-Fuller test was used to determine the stationarity of the variables while ARDL model and the ARDL long run Bounds test were used to estimate the short and long run relationships amongst the variables. The VECM was employed to determine the speed of correction of disequilibrium. the results reveal that the variables are co-integrated and the VEC indicated a speed of over 88% in correcting disequilibrium in the short run. Government capital expenditure, with a positive and significant impact does not exhibit the desired effect on employment in the short run. However, in the long run, it exerts a negative and significant impact on the rate of unemployment and this does agree with apriori expectation. Government revenue expenditure in the long run has a positive and significant impact on unemployment indicating its ineffectiveness in controlling unemployment. In the short run though, its impact is negative though not significant. Government revenue however, has a negative and significant impact on unemployment rate both in the short run and long run. This suggests that government decision on tax has capacity to impact the state of employment in Nigeria.
References
Abdullahi, D. &Kardi, B. A. (2012) Role of governance in employment generation in Nigeria.IOSR Journal of Business and Management (IOSRJBM) ISSN: 2278-487X Volume 3, Issue 3 (Sep-Oct. 2012), PP 27-31 www.iosrjournals.org www.iosrjournals.org
Abdullahi, S. A. (2010). Impact of government expenditure on employment generation: Evidence from Nigeria. Department of Financial Studies Faculty of Management Sciences National Open University of Nigeria, Lagos. Retrieved online, March, 2016
Abu, N., & Abdullahi, U. (2010). Government expenditure and economic growth in Nigeria: A disaggregated analysis. Business and Economics Journal, 4.
Abubakar,A.B (2016) Dynamic effects of fiscal policy on output and unemployment in Nigeria: An Econometric Investigation. CBN Journal of Applied Statistics Vol. 7 No. 2 (December, 2016) 101-122
Adawo, A. M., Essien, E. B. & Ekpo, N. U. (2012). Is Nigeria’s unemployment problem unsolvable?, Current Research Journal of Social Sciences, 4(6): 389-395
Anthanasios, O.T. (2013). The unemployment effects of fiscal policy: Recent evidence from Greece. IZA Journal of European Labour Studies, 2(11)
Austin, A.M. &Ogbole, F. O. (2014).Public Sector Spending and Macroeconomic Variables in Nigeria. European Journal of Business and Management Vol.6, No.18, 2014
Dewett, K.K., & Navalur, M.H. (2012).Modern economic theory. New Delhi: S. Chand & company LTD.
Estache, A. &Garsous, G. (2012).The scope for an impact of infrastructure investments on jobs in developing countries, International Finance Corporation EconomicsNote 4. Retrieved on May 20, 2016 from http://www.ifc.org/wps/wcm/connect/32da92804db
Ewubare, D.B. &Maeba, S. L. (2018). Effect of public expenditure in construction and transportation sectors on employment in Nigeria. International Journal of Science and Management Studies (IJSMS) E-ISSN: 2581-5946 Volume: 01 Issue: 04 November to December 2018 www.ijsmsjournal.org © 2018, IJSMS Page 130
Holden, S., &Sparrman, V. (2013). Do government purchases affect unemployment? http://folk.uio.no/sholden/wp/fiscal-U.pdf (Accessed August 28, 2013).
Keynes, J. M. (1936). The general theory of employment, interest and money. London and New York, Macmillan.
Kingsley G. & Ordu, P. A. (2019) The effect of public revenue and public expenditure in the realization of macroeconomic objectives of government of Nigeria: Evidence of 2015-2017. International Journal of Innovative Finance and Economics Research 7(3):1-13, July-Sept.,, 2019 © SEAHI PUBLICATIONS, 2019
Mehmood, R. &Sadiq, S. (2010). “The relationship between government expenditure and poverty: A cointegration analysis”, Romanian Journal of Fiscal Policy (RJFP), ISSN 2069-0983, Editura ASE, Bucharest, Vol. 1, Issue. 1, pp. 29-37
Nwaeze,N.C.(2019) Does government expenditure stimulate employment generation? a disaggregated empirical evidence from the Nigerian economy. Journal of Economics and Sustainable Development www.iiste.org ISSN 2222-1700 (Paper) ISSN 2222-2855 (Online) DOI: 10.7176/JESD Vol.10, No.16, 2019
Nwosa, P. I. (2014). Government expenditure, unemployment and poverty rates in Nigeria, Journal of Research in National Development, 12 (1): 77-84.
Obayori, J.B.(2016) Fiscal policy and unemployment in Nigeria. The International Journal of Social Sciences and Humanities Invention Volume 3 issue 2 2016 page no.1887-1891 ISSN: 2349-2031 Available Online At: http://valleyinternational.net/index.php/our-jou/theijsshi
Okunola, A. O. (2021). Employment dynamics and fiscal policy in ECOWAS: A panel data analysis. Journal of Accounting and Taxation. Vol. 13(4), pp. 283-290, October-December 2021 DOI: 10.5897/JAT2021.0497 Article Number: C02AA4368017 ISSN 2141-6664 Copyright © 2021 http://www.academicjournals.org/JAT
Olanipekun E. F. & David B. (2020). Functional government spending, unemployment and poverty reduction in Nigeria. Journal of Economics and Development Studies March 2020, Vol. 8, No. 1, pp. 111-123 ISSN: 2334-2382 (Print), 2334-2390 (Online) Copyright © The Author(s) Published by American Research Institute for Policy Development DOI: 10.15640/jeds.v8n1a9 URL: https://doi.org/10.15640/jeds.
Olukayode, E. M. &Olorunfemi Y. A.(2018) fiscal policy tools, employment generation and sustainable development in Nigeria. ACTA UNIVERSITATIS DANUBIUS Vol 14, no 3, 2018 186
Onoh, J.K.(2007) Dimensions of Nigeria’s monetary & fiscal policies – domestic and external. Astra Meridian Publishers, page 122. ISBN 978-36200-0-2.
This work is licensed under a Creative Commons Attribution 4.0 International License.
In submitting the manuscript to the Central Asian Journal of Innovations on Tourism Management and Finance, the authors certify that:
- They are authorized by their co-authors to enter into these arrangements.
- The work described has not been formally published before, except in the form of an abstract or as part of a published lecture, review, thesis, or overlay journal.
- That it is not under consideration for publication elsewhere,
- The publication has been approved by the author(s) and by responsible authorities – tacitly or explicitly – of the institutes where the work has been carried out.
- They secure the right to reproduce any material that has already been published or copyrighted elsewhere.
- They agree to the following license and copyright agreement.
License and Copyright Agreement
Authors who publish with Central Asian Journal of Innovations on Tourism Management and Finance agree to the following terms:
- Authors retain copyright and grant the Central Asian Journal of Innovations on Tourism Management and Finance right of first publication with the work simultaneously licensed under Creative Commons Attribution License (CC BY 4.0) that allows others to share the work with an acknowledgment of the work's authorship and initial publication in this journal.
- Authors can enter into separate, additional contractual arrangements for the non-exclusive distribution of the Central Asian Journal of Innovations on Tourism Management and Finance published version of the work (e.g., post it to an institutional repository or edit it in a book), with an acknowledgment of its initial publication in this journal.
- Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) before and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work.
