Examining the Effect of Government’s Social Expenditure on Unemployment in Nigeria

Abstract

This study examines the effect of government social expenditures on unemployment in Nigeria from 1990 to 2022. Using the Vector Error Correction Model (VECM) method to analyse both the short- and long-run effects, the results revealed that population growth had a significant positive impact on unemployment, while education expenditure showed a positive but insignificant effect. Conversely, health and infrastructural expenditures demonstrated negative impacts on unemployment, suggesting that investment in these areas contributes to reducing unemployment. Based on these findings, it is recommended that policymakers increase public investment in the health sector and infrastructure. This could involve expanding healthcare infrastructure, enhancing funding for medical training programmes, and improving healthcare delivery systems. Furthermore, the government should prioritise and scale up infrastructure development projects, such as road construction, public transportation systems, and urban development initiatives. These projects have the potential to stimulate job creation across various sectors, including construction, maintenance, and management, thereby addressing unemployment and fostering economic development.