Crude Oil Price Shocks and Unemployment in Nigeria

The study examined crude oil price shocks and unemployment in Nigeria from 1980 to 2019. The study made use of annual data which were collected from CBN statistical bulletins and World Development Index (WDI). The major techniques of analysis adopted include Augmented Dickey Fuller (ADF) unit root test, Autoregressive Distributed Lag (ARDL) approach and Impulse Response Function (IRF). The ADF result showed that while crude oil export was stationary at level, others were stationary at first difference. The ARDL results showed positive long-run and short run effect of oil revenue on unemployment rate. Similarly, oil exports showed positive effect on unemployment rate in Nigeria while exchange rate is negatively related with unemployment rate during the period of study. Based on the results, it was concluded that there is positive response or symmetry shock between crude oil price and unemployment rate. Among others, it was recommended that given that a rise in oil price brings in more revenues to the government, it is important that the government channels realized fund from the sales of crude oil into investment in critical infrastructure facilities such as the building of more energy plants to improve electricity generation which will in turn boost employment generation.