Remittance Inflow and Unemployment in Nigeria

Godfrey Ihedimma () and Godstime Opara ()
Additional contact information
Godfrey Ihedimma: Spiritan University, Nneochi, Abia State, Nigeria
Godstime Opara: Imo State University, Owerri, Imo State, Nigeria

No 20/103, Research Africa Network Working Papers from Research Africa Network (RAN)

Abstract: Nigeria is unarguably one of the countries with its citizens widely spread across the globe and the income earned forms a huge chunk of remittance back to Nigeria. The study focuses on what implications remittances may have for unemployment in Nigeria. Remittance is treated as being endogenously determined by the number of migrants, the nominal exchange rate (with the Naira as local currency), the inflation rate and the migrants’ income. Data from 1981 to 2019 is calibrated for structural break points and stationarity under conditions of regimes changes. While the data was found to have been affected by regime changes and stationary in levels, an Instrumental Variable Regression model was estimated and it was found that remittance positively and significantly influence unemployment. However, when remittance is interacted with the dependants in Nigeria, unemployment is observed to fall. The study strongly recommends that fiscal planning should take an account of the inflow of remittances when curbing unemployment. The study further recommends that there is the need to deliberately encourage a rise in the demand for the Naira as this would protect the value of locally produced goods from being eroded by remittances.

Keywords: Remittance; Dependant; Endogenous; Financial Openness; Unemployment; Interaction; IV Estimation (search for similar items in EconPapers)
JEL-codes: F24 J61 O15 (search for similar items in EconPapers)
Pages: 19
Date: 2020-01
New Economics Papers: this item is included in nep-mon and nep-pay
References: View references in EconPapers View complete reference list from CitEc
Citations:

Forthcoming: Iranian Economic Review

Downloads: (external link)
http://publications.resanet.org/RePEc/abh/abh-wpap ... yment-in-Nigeria.pdf Revised version, 2020 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:abh:wpaper:20/103

Access Statistics for this paper

More papers in Research Africa Network Working Papers from Research Africa Network (RAN)
Bibliographic data for series maintained by Anutechia Asongu Simplice ().