Infrastructure Development, Unemployment Rate and Poverty Level in Nigeria (1980-2013)

Abstract

The study investigates the dynamic interaction among Infrastructure Development, Unemployment and Poverty Level in Nigeria. The study examined the interactive effects among Infrastructure Development, Unemployment and Poverty Level; and investigated the nature and direction of causality among Infrastructure Development, Unemployment and Poverty Level in Nigeria. This was with the view to providing empirical evidence on the linkages among Infrastructure Development, Unemployment and Poverty Level.

Secondary data were used in this study. Data on government capital expenditure as a measure of government capital expenditure, unemployment rate and Real consumption expenditure per capita used as a proxy for poverty level were sourced from statistical Bulletin published by Central Bank of Nigeria (CBN) and the National Bureau of Statistic (NBS) Abuja. Vector autoregressive Model was conducted in determining the interaction effects among the three variables and Pair-Wise granger causality Test was conducted in determining the direction of causality among the variables.

 The empirical result showed that an attempt to reduce poverty brings about a reduction in unemployment rate in the country. Moreover, government expenditure on capital projects reduces the level of unemployment over time in Nigeria. In addition, an attempt to reduce unemployment brings about reduction in poverty level while poverty increases at an initial stage of increase in capital expenditure but reduces poverty level over time. The study also indicated that as unemployment rate increases, the economic policies adopted by the government increases the capital expenditure of the government. There exists no causal relationship among the variables in Nigeria as revealed by the study.