Empirical Investigation of Effect of Globalization and Trade Liberalization on the Nigerian Labour Market

AFRAG024

Empirical Investigation of Effect of Globalization and Trade Liberalization on the Nigerian Labour Market

Justin C. Alugbuo1 Department of Economics,

College of Management Sciences (COLMAS),

Michael Okpara University of Agriculture, Umudike,

Abia State, Nigeria.

Email: jc.alugbuo@mouau.edu.ng

Sebastian O. Uremadu, PhD2* Correspondent Author

Department of Banking and Finance, College of Management Sciences (COLMAS),

Michael Okpara University of Agriculture, Umudike,

Abia State, Nigeria.

Email: sebauremadu@yahoo.com

+2348037876614

Abstract

While some scholars believe that globalization translates into substantial job creation in developing countries, others believe that it leads to job loss, and it is against this backdrop that this study investigated effect of globalization and trade liberalization on labour market in Nigeria for the period 1981-2019 with the help of the ARDL model of estimation and Toda and Yamamoto granger causality test to   determine   level   of   impact   that one variable has on another. Based on the issues covered in the literature review, empirical investigations were carried out on effect of globalization and trade liberalization on labour market in Nigeria. Results showed that foreign direct investment inflows (lnFDII) had a positive relationship with labour market in the short and long run periods in Nigeria, gross fixed capital formation percentage contribution of GDP (GFCF_GDP) had a weak positive relationship with labour force in the short run and insignificantly influenced labour market in the long run while real effective exchange rate (REER) had a positive and insignificant relationship with total labour force (TLABF) and at 5% level of significance in the long run; whereas, the result of Toda and Yamamoto granger causality test indicated a uni-directional causality between total labour force and gross fixed capital formation in Nigeria. Based on these findings, the study recommended that Nigeria, as a developing nation, should develop its own domestic technology in order to reap the full benefits of globalization and to prevent macroeconomic volatility, developed countries must liberalize their short-term capital movements gradually in order for globalization to succeed.

Keywords: Globalization; Trade Liberalization; Labour Market; labour Force.

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