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Unemployment and Economic Growth in Nigeria in the 21st Century: VAR Approach

Author

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  • Olawunmi Omitogun

    (Olabisi Onabanjo University)

  • Adedayo Emmanuel Longe

    (Olabisi Onabanjo University)

Abstract

This study investigates the impact of unemployment on economic growth in Nigeria in the 21st century using a Vector Autoregressive (VAR) approach using a secondary data spanning from 1986 to 2015. It aims at examining the dynamic effect of unemployment on growth in the context of Nigeria using the VAR approach to analyse the variations. Different methods such as the Augmented Dickey Fuller (ADF) test, johansen cointegration test, VAR model, impulse response test and variance decomposition test were employed to analyse the data. It was observed that the impact of unemployment vary over time as effort towards eradicating it are been made by the government in the country. The implication of the study is to inform researchers on the VAR model as an appropriate approach for dynamic analysis, to urge academicians to be more informative on the dynamic effects of unemployment in the economy, and to provide guidance to the government on the appropriate policy to adopt to tackle the issue of unemployment and inflation in the country. This study recommends increase in government expenditure towards the enhancement of individual skills in order to reduce unemployment and inflation.

Suggested Citation

  • Olawunmi Omitogun & Adedayo Emmanuel Longe, 2017. "Unemployment and Economic Growth in Nigeria in the 21st Century: VAR Approach," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 13(5), pages 155-168, OCTOBER.
    • Handle: RePEc:dug:actaec:y:2017:i:5:p:155-168
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    References listed on IDEAS

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    1. A. W. Phillips, 1958. "The Relation Between Unemployment and the Rate of Change of Money Wage Rates in the United Kingdom, 1861–1957," Economica, London School of Economics and Political Science, vol. 25(100), pages 283-299, November.
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    4. Papapetrou, Evangelia, 2001. "Oil price shocks, stock market, economic activity and employment in Greece," Energy Economics, Elsevier, vol. 23(5), pages 511-532, September.
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    1. repec:agr:journl:v:1(618):y:2019:i:1(618):p:115-128 is not listed on IDEAS
    2. Dankumo, Ali Madina & Ishak, Suryati & Oluwaseyi, Zubair Azeem & Onisanwa, Idowu Daniel, 2019. "Does Okun’s Law Explain the Relationship between Economic Growth and Unemployment in Nigeria?," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 53(3), pages 153-161.
    3. Malayaranjan SAHOO & Jayantee SAHOO, 2019. "The relationship between unemployment and some macroeconomic variables: Empirical evidence from India," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(1(618), S), pages 115-128, Spring.

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