Institutions, regulatory framework and labour market outcomes in Nigeria

Abiodun Folawewo

Journal of Social and Economic Development, 2016, vol. 18, issue 1, No 4, 67-84

Abstract: Abstract This paper examines the impact of two major pronounced institutional and regulatory measures, minimum wage and labour union, on labour market outcomes in Nigeria with particular focus on aggregate employment and unemployment, as well as sectoral employment and wage effects. The effect of minimum wage is captured using aggregate and sectoral Kaizt-type minimum wage index, while that of labour union is measured by union density. Static and dynamic analytical methods involving cointegration and error correction model techniques are used on annual data from 1970 to 2012. Results show that minimum wage has positive relationship with unemployment and negative relationship with aggregate employment. Similarly, union density has positive effect on unemployment. The effects of minimum wage and union density on employment and wages across sectors are mixed. It is argued that design and implementation of institutional and regulatory framework need caution, as they may yield unintended results.

Keywords: Institutions; Regulatory framework; Minimum wage index; Union density; Employment; Unemployment (search for similar items in EconPapers)
JEL-codes: J20 J28 J52 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (1)

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DOI: 10.1007/s40847-016-0028-5

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