Market Driven Reforms and the Structural Characteristics of Employment in Nigeria: An Econometric Analysis, 1986-2003

M. Feridun () and W.A. Isola ()

Applied Econometrics and International Development, 2005, vol. 5, issue 1

Abstract: This article aims at investigating the econometric relationship between market driven reforms and the structural characteristics of employment after the implementation of market reforms in the context of deregulation of interest rates and exchange rate in Nigeria in the late 1980s. Following the theoretical framework, three time series models are built on quarterly time data spanning the period 1986 to 2003 to estimate the relative effects of the market reform variables on the employment structure in agriculture, industry and services. Analysis has revealed that the interest rate and exchange rate are positively related to the share of agriculture in employment. However, of the two only exchange rate is statistically significant. Also, the movement of labour force from agriculture does not swell employment in the service sector as predicted by deindustrialisation. Rather, labour finds employment in the Nigerian informal sectors. Lastly, we found that the link between the share of industry in employment and market reform are important determinants of the structure of employment and that the structure of employment in industry is not positively influenced by market reforms. There is continual decline of the sector as labour draws to the informal sector. However, services and agriculture sectors benefit marginally in terms of gains in employment. A number of policy implications emerge from the study.

Date: 2005
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