MACROECONOMIC POLICY AND LABOUR MARKET OUTCOMES IN NIGERIA: PARTICIPATION AND PRODUCTIVITY EVIDENCE
DOI:
https://doi.org/10.18623/rvd.v23.6228Keywords:
Macroeconomic Policy, Labour Force Participation, Labour Productivity, Human Capital, Policy TransmissionAbstract
Nigeria’s labour market exhibits persistent informality, weak productivity growth, and volatile participation rates despite macroeconomic reforms, necessitating rigorous investigation into policy transmission mechanisms shaping employment quality, workforce engagement, and sustainable economic transformation. This study examines the transmission of macroeconomic policy to labour force participation and labour productivity in Nigeria within a unified econometric framework. Using annual time-series data (1990–2023) from the National Bureau of Statistics, Central Bank of Nigeria, World Development Indicators, and ILOSTAT, the analysis specifies dual equations capturing the extensive and intensive margins of labour market performance. An ARDL–Error Correction modelling approach is employed to distinguish short-run dynamics from long-run structural relationships. The results indicate that fiscal expansion and human capital investment significantly enhance labour participation and productivity, while monetary tightening exerts contractionary effects on labour absorption and efficiency. Error-correction estimates confirm stable long-run linkages between macroeconomic policy instruments and labour outcomes. The findings underscore the importance of coordinated fiscal prioritization, employment-sensitive monetary stabilization, and skills alignment reforms in addressing Nigeria’s productivity paradox and pervasive informality, thereby strengthening the macro–labour transmission mechanism for inclusive growth.
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