The Effects of some Major Macroeconomic Variables on Unemployment Rate in Nigeria: A Bounds Test Approach
Nigeria has been experiencing a high unemployment rate over the years. The main objective of this paper is to investigate the effects of some macroeconomic variables such as; Gross Domestic Product, Treasury bill, and Inflation rate on unemployment rate in Nigeria over the period 2006Q1-2018Q4. The long-run and short-run impacts of the variables were analyzed using the bound testing co-integration. The result shows there is a long-run relationship among the variables. The dynamic error correction was carried out, and the long-run and short-run coefficients were extracted using the ARDL model. The result shows that the Gross Domestic Product has a positive significance on unemployment in the long run. However, in the short-run, only GDP contribute significantly to the unemployment rate. The Granger non-causality shows that Treasury bills do not cause Gross Domestic Product. There is unilateral causality from Treasury bill to the unemployment rate and inflation rate.
