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Institutions, regulatory framework and labour market outcomes in Nigeria

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  • Abiodun O. Folawewo

    (University of Ibadan)

Abstract

This paper examines the impact of two major pronounced institutional and regulatory measures, minimum wage and labour union, on labour market outcomes in Nigeria with particular focus on aggregate employment and unemployment, as well as sectoral employment and wage effects. The effect of minimum wage is captured using aggregate and sectoral Kaizt-type minimum wage index, while that of labour union is measured by union density. Static and dynamic analytical methods involving cointegration and error correction model techniques are used on annual data from 1970 to 2012. Results show that minimum wage has positive relationship with unemployment and negative relationship with aggregate employment. Similarly, union density has positive effect on unemployment. The effects of minimum wage and union density on employment and wages across sectors are mixed. It is argued that design and implementation of institutional and regulatory framework need caution, as they may yield unintended results.

Suggested Citation

  • Abiodun O. Folawewo, 2016. "Institutions, regulatory framework and labour market outcomes in Nigeria," Journal of Social and Economic Development, Springer;Institute for Social and Economic Change, vol. 18(1), pages 67-84, October.
    • Handle: RePEc:spr:jsecdv:v:18:y:2016:i:1:d:10.1007_s40847-016-0028-5
    DOI: 10.1007/s40847-016-0028-5
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    Cited by:

    1. Abiodun O. Folawewo & Olusegun A. Orija, 2020. "Informal-formal workers' transition in Nigeria: A livelihood analysis," WIDER Working Paper Series wp-2020-146, World Institute for Development Economic Research (UNU-WIDER).

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    More about this item

    Keywords

    Institutions; Regulatory framework; Minimum wage index; Union density; Employment; Unemployment;
    All these keywords.

    JEL classification:

    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy
    • J52 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Dispute Resolution: Strikes, Arbitration, and Mediation

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