Revisiting the Trade and Unemployment Nexus: Empirical Evidence from the Nigerian Economy

Forthcoming in Journal of Public Affairs. DOI: 10.1002/pa.2053.

22 Pages Posted: 14 Nov 2019 Last revised: 16 Jan 2020

See all articles by Stephen Taiwo Onifade

Stephen Taiwo Onifade

Selcuk University

Ahmet Ay

affiliation not provided to SSRN

Simplice Asongu

African Governance and Development Institute

Festus Bekun

Istanbul Gelisim University - Faculty of Economics Administrative and Social Sciences

Date Written: January 1, 2019

Abstract

The recent exacerbation of unemployment crisis in Nigeria stands to be a serious threat to both socio-economic stability and progress of the country just as the report from the nation’s bureau of statistics shows that at least over 8.5 million people had no gainful employment at all as at the last quarter of the year 2017. It is on the above premise, that the present study explores the link between trade and unemployment for the case of Nigeria with the intention of exploring how the unemployment crisis has been impacted within the dynamics of the country’s trade performance. The empirical evidence shows that the nation’s terms of trade were insignificant to unemployment rate while trade openness and domestic investment, on the other hand, have significant opposing impacts on unemployment in Nigeria over the period of the study. Further breakdowns from the empirical analysis also revealed that the Philips curves proposition is valid within the Nigerian economic context while the evidences for the validity of Okun’s law only exist in the short-run scenario. Based on the empirical results, we recommend that concerted effort should be geared toward stimulating domestic investment by providing adequate financial and infrastructural facilities that will promote ease of doing business while utmost precautions are taken to ensure that unemployment crisis is not exacerbated when combating inflation in the economy in the wake of dynamic trade relations.

Keywords: Nigeria; Unemployment; Trade; Phillips Curves; Okun’s law

JEL Classification: E23; F21; F30; O16; O55

Suggested Citation

Onifade, Stephen and Ay, Ahmet and Asongu, Simplice and Bekun, Festus, Revisiting the Trade and Unemployment Nexus: Empirical Evidence from the Nigerian Economy (January 1, 2019). Forthcoming in Journal of Public Affairs. DOI: 10.1002/pa.2053.. Available at SSRN: https://ssrn.com/abstract=3479232 or http://dx.doi.org/10.2139/ssrn.3479232

Stephen Onifade

Selcuk University ( email )

Department of Economics
Department of Economics
Konya, Konya 42003
Turkey

Ahmet Ay

affiliation not provided to SSRN

Simplice Asongu (Contact Author)

African Governance and Development Institute ( email )

P.O. Box 8413
Yaoundé, 8413
Cameroon

Festus Bekun

Istanbul Gelisim University - Faculty of Economics Administrative and Social Sciences ( email )

Turkey

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