Government Expenditure and Unemployment Rate in Nigeria: An Empirical Analysis

Autor: Nwamuo, Chukwuemeka
Jazyk: angličtina
Rok vydání: 2022
Předmět:
DOI: 10.5281/zenodo.6985271
Popis: The study investigated the impact of government expenditure on unemployment rate in Nigeria. Time series data spanning from 1991 to 2020 which were used in the study were sourced from the Central Bank of Nigeria (CBN) statistical bulletin and the World Development Indicators (WDI). The ARDL bounds testing approach to cointegration was used to analyse the data. Autoregressive Distributed Lag (ARDL) model and Error Correction Model (ECM) were utilized to address the main objectives of the study. The estimated short run coefficient result revealed that capital expenditure has a negative and significant impact on unemployment rate while recurrent expenditure and credit to private sector have a positive and significant impact on unemployment rate. The speed of adjustment for correcting disequilibrium from the previous year to equilibrium in current year is 37.23 percent as shown by the coefficient of ECM. The estimated long run coefficient showed that capital expenditure and recurrent expenditure have a negative relationship with unemployment rate. The result also showed that capital expenditure is statistically significant while recurrent expenditure is not statistically significant. The result also showed that credit to private sector has a positive and significant impact on unemployment rate. Based on these findings, the study recommends proper management of government expenditure by ensuring that capital expenditures are channelled towards productive sectors and ensure that there is transparency in the management of such fund.
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