The Structural Transformation Paradox: A Sectoral Analysis of Employment Elasticities in Nigeria

Itoro Ubi-Abai () and Alex Iriabije
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Itoro Ubi-Abai: Department of Economics, Akwa Ibom State University, Nigeria
Alex Iriabije: Department of Economics, University of Uyo, Uyo, Nigeria.

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Abstract: The study investigated the structural transformation paradox by undertaking a sectoral analysis of employment elasticities in Nigeria across agriculture, manufacturing, and services sectors from 1981 to 2024. The theoretical foundation comprised Lewis' dual-sector model, Chenery- Srinivasan's patterns of transformation, and Rodrik's premature de- industrialization. Using ordinary least squares, data on the value added of the three sectors were regressed on the employment shares of the three sectors, respectively, after adjusting for structural periods and control variables. The findings revealed a disconnect between sectoral output growth and employment generation. Agriculture, while exhibiting the highest employment elasticity, reflects low-productivity subsistence farming. Manufacturing demonstrates a critically low and declining elasticity. The services sector presents a dualistic structure of a high-productivity, low-employment segment coexisting with a low-productivity, high-employment informal segment. The results confirmed the existence of a structural transformation paradox in Nigeria, where economic growth has not translated into productive mass employment.

Date: 2026-05-20
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Published in International Journal of Scientific Research in Social Sciences and Management Studies, 2026, 1 (9), pp.1. ⟨10.48028/iiprds/ijsrssms.v9.i1.01⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05736565

DOI: 10.48028/iiprds/ijsrssms.v9.i1.01

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