African Journal of
Business Management

  • Abbreviation: Afr. J. Bus. Manage.
  • Language: English
  • ISSN: 1993-8233
  • DOI: 10.5897/AJBM
  • Start Year: 2007
  • Published Articles: 4179

Article in Press

Unemployment Hysteresis and Persistence in Nigeria: Implication for policy response

Uzodigwe Anthony

  •  Received: 30 March 2022
  •  Accepted: 15 September 2022
Unemployment has remained a perennial problem in Nigeria for the last three decades. The Nigerian government like every other government around the world is committed to reducing it to a tolerable rate. However, policy measures taken so far to tackle unemployment have not yielded the desired results. Unemployment, especially youth unemployment has been soaring. To tackle this menace, it is important to understand the nature of Nigerian unemployment. This understanding will offer policymakers some policy menu for curbing this threat. Over time, numerous studies have investigated the determinants of unemployment in Nigeria and have identified many indicators to be significant. If things were right, manipulating these fundamentals would necessarily reduce unemployment. But that is not the case in Nigeria; unemployment has been on the rise despite all the policy efforts. This, therefore, necessitated the need to study unemployment hysteresis and persistence in Nigeria. This study explored this issue using quarterly seasonally adjusted unemployment data from 1970 -2019. To capture the issue of a structural break in Nigeria, our dataset was divided into sub-samples. The analysis was done using a battery of unit root tests with and without break, as well as Markov-Switching regression. The study reveals that unemployment in Nigeria is persistent and that there exists hysteresis in Nigerian unemployment. The study, therefore, recommends, among other things, that while the government attempts to improve workers' welfare by a way of a good pay package, it should devote and channel more resources to providing productive jobs, like real output-oriented jobs, not just service-oriented ones.

Keywords: Unemployment; Hysteresis, Nigeria, Policy