Macroeconomic Policies and Unemployment in Nigeria

The study investigated the impact of macroeconomic policies (selected fiscal and monetary policies) on unemployment in Nigeria between 1981 and 2023. The study utilised annual time series data sourced from the Central Bank of Nigeria Statistical Bulletin 2023 edition. The data were analysed using Vector Autoregressive (VAR) model. Findings revealed that macroeconomic policy variables such as government expenditure (GEXP), tax revenue (TAXREV), and Broad money supply (MS) have negative but significant impact on unemployment rate in Nigeria over the study period. While variables such as lending rate (R) has a significant positive impact on unemployment rate in Nigeria. Government transfer payments (GTRF) on the other hand had a positive but insignificant impact on unemployment rate in Nigeria over the period of the study. The study thus concludes that macroeconomic policies such as government expenditure, tax and broad money supply are veritable tools to reduce the soaring unemployment rate in Nigeria. Thus, it is recommended for the Nigerian government to increase its expenditure in the productive sectors of the economy and cut down its transfer payments.