Impact of International Remittances on Unemployment in Nigeria

Abstract

Despite the implementation of stabilization measures during the present recession in Nigeria, unemployment has assumed an alarming dimension and a crisis proportion with millions of able-bodied persons who are to accept jobs at the prevailing wage rate but are unable to find placements. Unemployment can be reduced in developing countries through developmental projects but this can be achieved due to lack of finance. Sequel to that, remittance inflow serves as finance for investment purposes. This study focuses on the impact of international migrant remittances on unemployment rate in Nigeria bearing in mind that reducing the rate of unemployment is one of the macroeconomic objectives of every country. An unemployment rate model was formulated and the unit root test was first applied to the data set. The time series were stationary and the two-stage least squares (2SLS) method was used to identify the impact of remittances on unemployment rate in Nigeria. Findings reveal that international remittances affect unemployment negatively and there exists a unidirectional causality between international migrant remittances and unemployment without feedback. The study recommends that the government and other stakeholder should map out programmes that will sensitize majority of the Nigerian populace on the benefit of investing remittance money so as to become entrepreneurs, create job opportunities and become employers of labour.

Keywords: International remittances, Private Investment, Unemployment, Two Stage Least Squares.

DOI: 10.7176/JESD/12-1-05

Publication date: January 31^st 2021