Macroeconomic Policies and Unemployment in Nigeria

Abstract

The study investigates the influence of macroeconomic policies on unemployment in Nigeria from 1981 to 2022, employing the Johansen Cointegration Test and Vector Error Correction Model (VECM) approach. The Johansen test reveals a long-run relationship among the macroeconomic variables considered. However, the results of the Vector Error Correction Mechanism indicate that the variables under study (Government Expenditure (GEXP), Tax Revenue (TAXREV), Government Transfer Payment (GTRF), Money Supply (MS), and Lending Rate (R)) do not exhibit significance and do not affect unemployment in Nigeria. As a recommendation, the study suggests that the government should ensure that transfer payments such as NPOWER, TRADERMONI, FARMERMONI, and Pension payments are appropriately directed to achieve desired outcomes.

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