Does Unemployment Still Follow Hysteresis Hypothesis in Nigeria? Evidence from Linear and Nonlinear Unit Root Test Methods

Raifu, Isiaka Akande; Abodunde, Temitope T.

doi:10.36941/jicd-2020-0007

Cited by 4 publications

(2 citation statements)

References 14 publications

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“…Besides, an unemployed person will likely suffer psychological issues, social exclusion, and health problems. Arising from this, several studies have been conducted to investigate the socio-economic, political, and psychological effects of unemployment (Arango & Flórez, 2020; Folawewo & Adeboje, 2017; Ogunjimi, 2021; Raifu, 2017; Raifu & Abodunde, 2020; Raifu et al, 2020). Among the factors identified is the country’s level of financial development (Ajide, 2020; Bayar, 2016; Raifu, 2019).…”

Section: Introductionmentioning

confidence: 99%

The Effect of Financial Development on Unemployment in Emerging Market Countries

Raifu

Afolabi²

2022

Global Journal of Emerging Market Economies

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This study examined the effect of financial development on unemployment in 19 emerging market countries, considering their age groups and gender dichotomy. The data covers the period from 1991–2019. Pooled Ordinary Least Square (OLS), Dynamic OLS, and quantile regression via moments were employed as the estimation methods. Robustness was tested with Fully Modified OLS and Canonical Cointegration Regression (CCR) estimation methods. Our results show that financial development has a conditional mean reducing effect on unemployment and a reducing effect on the distribution of unemployment. However, the reducing effect of financial development on the distribution of unemployment varies across the working-age population and youths. Thus, there is a need to formulate and implement a long-term financial policy to ensure economic growth and guarantee employment for the working-age population and the youths irrespective of gender.

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Section: Introductionmentioning

confidence: 99%

The Effect of Financial Development on Unemployment in Emerging Market Countries

Raifu

Afolabi²

2022

Global Journal of Emerging Market Economies

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“…Given these findings, we see that a persistently high rate of unemployment in Africa and its regions can lead to lower participation in the labour force, a situation that can aggravate the existing unemployment problem and lead to permanent unemployment (Raifu and Abodunde, 2020). This is because the hope of citizens to get jobs becomes slimmed due to their perpetual state of unemployed which has led to the loss of skills acquired through formal or informal education.…”

Section: Conclusion and Policy Recommendationsmentioning

confidence: 95%

Labour force participation and unemployment rate: does discouraged worker effect hypothesis or unemployment invariance hypothesis hold in Africa?

Raifu

Adeboje²

2022

AJEMS

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PurposeThe purpose of this study is to examine the existence of discouraged worker effect hypothesis and unemployment invariance hypothesis in Africa, including its five regional groups. Specifically, the study tests the existence of co-integration between different categories of labour force participation and unemployment rate, total male and female labour force participation and the unemployment rate for age brackets 15–24, 15–64 and 15+, respectively.Design/methodology/approachThe study uses the data of 52 countries in Africa which cover the period from 1991 to 2018. Three co-integration estimation techniques namely, the Kao co-integration test, Pedroni co-integration test and Westerlund co-integration test are used to validate the existence of co-integration between the labour force participation and unemployment rate. The dynamic ordinary least square is further used to explore the impact of the unemployment rate on labour force participation, while the pooled ordinary least squares (POLS) that accounts for individual country and time effects is employed for robustness check.FindingsExcept for Southern Africa, it is found that the discouraged worker effect hypothesis holds in Africa and the rest of its regions. This suggests that there is a long-run relationship between labour force participation rate and unemployment rate irrespective of age group and gender classifications. To some extent, the authors discover the existence of cross-sectional dependence in the panel. There is also an inverse relationship between labour force participation and the unemployment rate. This implies that when the unemployment rate is high, labour force participation tends to decline. The results are, however, sensitive to the choice of estimation method.Research limitations/implicationsThe study is limited to the examination of linear co-integration between labour force participation and the unemployment rate in Africa and its five regions. The future study can investigate the possibility of a nonlinear or an asymmetric relationship between labour for participation and the unemployment rate.Social implicationsThus, a policy framework that would generate employment creation is greatly required in Africa.Originality/valueTo the best of the authors’ knowledge, this is a pioneer work that addresses the issue of co-integration between labour force participation and unemployment rate for Africa and its five regions taking into consideration gender and age brackets of labour force participation and unemployment.

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Asymmetric persistence and the unemployment hysteresis question in emerging markets: evidence from advanced quantile unit-root tests

Kılıç

Yavuz

Ergen

et al. 2023

Studies in Economics and Econometrics

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Does Unemployment Still Follow Hysteresis Hypothesis in Nigeria? Evidence from Linear and Nonlinear Unit Root Test Methods

Cited by 4 publications

References 14 publications

The Effect of Financial Development on Unemployment in Emerging Market Countries

The Effect of Financial Development on Unemployment in Emerging Market Countries

Labour force participation and unemployment rate: does discouraged worker effect hypothesis or unemployment invariance hypothesis hold in Africa?

Asymmetric persistence and the unemployment hysteresis question in emerging markets: evidence from advanced quantile unit-root tests

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