Employment Intensity of Agricultural Growth in Nigeria

Abstract

At over 50 per cent employment contribution, agriculture will continue to provide the bulk of employment in Nigeria for some time to come. It, therefore, becomes imperative to determine the employment intensity of agricultural growth with a view to advancing policies that will help to tame the unemployment problem.  Time series secondary data covering 1981 to 2014 on the rebased Gross Domestic Product (GDP) and sectoral Gross Value Added (GVA) at 2010 constant basic prices, employment, wage rate, inflation rate and interest rate were collected from the National Bureau of Statistics and the Central Bank of Nigeria on the agricultural sector. The variables were collated and summarised into a table of data. The unit root test was carried out to test for stationarity of variables. Sectoral employment elasticities of growth were measured using Vector Error Correction Model (VECM) regression.  Data was analysed using descriptive statistics and VECM at α_0.05. Agriculture sectoral elasticity of employment was -0.13, indicating that output growth in the sector, during the period, was achieved through productivity increases rather than the employment of more persons. Agricultural sectoral employment depended on GVA growth (agriculture β = -0.13 ; wage rate (β = -0.023), interest rate (β = -0.011), inflation rate (β = -0.002), and the inter-temporal (t-x) relationships.  Employment in agriculture depended on previous year’s wage rate (β =-0.023) in agriculture and previous year’s agricultural output (β = -0.13). Previous two years’ employment in agriculture (agriculture_t-2; β = -1.94) previous year’s agricultural output (GVA agriculture_t-1; β=-0.13) and previous year’s wage rate (wage rate_t-1; β=-0.023) limit current year’s agricultural employment. Gross Value Added growth affected agricultural employment negatively in the period under review. Wage, inflation, and interest rates reduced employment.

Keywords: Economic growth, Employment elasticity, Gross Value Added, Agricultural Sector.

DOI: 10.7176/JPID/60-03

Publication date:July 31^st 2021