Unemployment and Economic Growth: Testing the Validity of Okun’s Law in Nigeria

Ibrahim Sahabi Muhammad
Additional contact information
Ibrahim Sahabi Muhammad: Department of Economics, Shehu Shagari University of Education, Sokoto, Nigeria

International Journal of Research and Innovation in Social Science, 2023, vol. 7, issue 12, 233-242

Abstract: This study explores the dynamic relationship between unemployment and Gross Domestic Product (GDP) growth in the context of the Nigerian economy from 1991 to 2021. Guided by Okun’s Law, which posits a negative correlation between these two variables, rigorous econometric analysis was employed to investigate their empirical validity in the Nigerian context. The results of the analysis demonstrate a statistically significant and negative relationship between the unemployment rate and GDP growth. Specifically, a one-percentage-point increase in the unemployment rate is associated with a substantial decrease in GDP growth of approximately 2.5 percentage points. These findings affirm the relevance of Okun’s Law in Nigeria, highlighting the significant effect of unemployment on economic performance. The study also provides valuable insights for policymakers, offering evidence-based recommendations to guide the formulation of effective macroeconomic policies, including targeted measures to reduce unemployment and enhance economic forecasting.

Date: 2023
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.rsisinternational.org/journals/ijriss/ ... issue-12/233-242.pdf (application/pdf)
https://www.rsisinternational.org/journals/ijriss/ ... kuns-law-in-nigeria/ (text/html)

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:bcp:journl:v:7:y:2023:i:12:p:233-242

Access Statistics for this article

International Journal of Research and Innovation in Social Science is currently edited by Dr. Nidhi Malhan

More articles in International Journal of Research and Innovation in Social Science from International Journal of Research and Innovation in Social Science (IJRISS)
Bibliographic data for series maintained by Dr. Pawan Verma ().