Notes on Jobless Growth in Nigeria
The phenomenon of jobless growth is widely discussed in literature on employment in developed countries.
In an attempt to examine the phenomenon of jobless growth in Nigeria, Africa's largest economy, we carried out a study to estimate the employment elasticity of economic growth.
In an attempt to examine the phenomenon of jobless growth in Nigeria, Africa's largest economy, we carried out a study to estimate the employment elasticity of economic growth.
There are two important findings from the study. First, economic growth was found to be employment elastic and significant, implying that the notion of jobless growth -whereby economic growth is negatively related to level of employment - does not apply to the Nigerian economy.
Second, foreign private investment was observed to be employment inelastic. This indicates that foreign private investments may be engaging more capital-intensive technologies rather than labour-intensive technologies in a labour-surplus economy.
Otherwise, foreign private investments may be creating jobs but not so much for Nigerians, leading to capital flight.
In order to ensure that foreign private investment is employment-generating, fostering inclusive growth, the government should ensure strict implementations of and compliance to a local content policy with respect to employment ratio in foreign-owned multinationals.
Also, incentives for labour-intensive approaches to production, especially in manufacturing should be encouraged; this will facilitate absorption of surplus labour in the Nigerian economy.
Moreover, employment in foreign private interests holds the promise of local capacity building and technology spillovers to the domestic economy through the labour turnover channel.
Otherwise, foreign private investments may be creating jobs but not so much for Nigerians, leading to capital flight.
In order to ensure that foreign private investment is employment-generating, fostering inclusive growth, the government should ensure strict implementations of and compliance to a local content policy with respect to employment ratio in foreign-owned multinationals.
Also, incentives for labour-intensive approaches to production, especially in manufacturing should be encouraged; this will facilitate absorption of surplus labour in the Nigerian economy.
Moreover, employment in foreign private interests holds the promise of local capacity building and technology spillovers to the domestic economy through the labour turnover channel.
The discussion continues...
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