Pages: (124-143 )
Abstract
Economic globalisation has been attributed to both positive and negative effects in Nigeria, including increased inequality, external vulnerability, brain drain, and sectoral shifts that heighten temporary unemployment This study investigates the impact of economic globalization on unemployment in Nigeria from 2001 to 2022, drawing on Okun’s rule and globalization theory. Employing a modified linear model based on Dogan (2016), the analysis incorporates economic openness, foreign direct investment (FDI), and exchange rate as proxies for globalization, with unemployment as the dependent variable. Using annual time-series data from the Central Bank of Nigeria and estimating via Ordinary Least Squares (OLS), findings revealed that economic openness has no significant effect on unemployment. FDI is positively associated with unemployment, suggesting limited domestic absorptive capacity, while exchange rate fluctuations exhibited a significant negative relationship with joblessness. Granger causality tests indicated that both globalization and unemployment predict exchange rate dynamics. The study concluded that unregulated globalization may exacerbate labour market vulnerabilities. Policy recommendations include strengthening FDI oversight, promoting inclusive labour policies, and reforming education to enhance youth employability and entrepreneurial capacity.Economic globalisation has been attributed to both positive and negative effects in Nigeria, including increased inequality, external vulnerability, brain drain, and sectoral shifts that heighten temporary unemployment This study investigates the impact of economic globalization on unemployment in Nigeria from 2001 to 2022, drawing on Okun’s rule and globalization theory. Employing a modified linear model based on Dogan (2016), the analysis incorporates economic openness, foreign direct investment (FDI), and exchange rate as proxies for globalization, with unemployment as the dependent variable. Using annual time-series data from the Central Bank of Nigeria and estimating via Ordinary Least Squares (OLS), findings revealed that economic openness has no significant effect on unemployment. FDI is positively associated with unemployment, suggesting limited domestic absorptive capacity, while exchange rate fluctuations exhibited a significant negative relationship with joblessness. Granger causality tests indicated that both globalization and unemployment predict exchange rate dynamics. The study concluded that unregulated globalization may exacerbate labour market vulnerabilities. Policy recommendations include strengthening FDI oversight, promoting inclusive labour policies, and reforming education to enhance youth employability and entrepreneurial capacity.
Keywords: Economic globalization, foreign direct investment, Nigeria, Ordinary least squares, Unemployment.,