How Does Public Debt Affect Unemployment in Nigeria

Abstract

The study examined the impact of disaggregated debt components on unemployment in Nigeria covering the period 1992 to 2020. The Autoregressive Distributed Lag (ARDL) method was used on account of the outcome of stationarity tests of the times series data. The result showed a highly positive and significant relationship between unemployment and external debt. The recommendations include that a fundamental consideration for any future public borrowing should be its employment generation capacity. An employment generation benchmark needs to be established for all future borrowing, in recognition of the principle that where no new employment can be generated, existing ones should not be endangered.

Keywords: external debt, OLS, ARDL, unemployment.

JEL: E24 H63 H81 J64