Government Spending in Selected Sectors and Job Creation in Nigeria: A Comparative Analysis
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This paper examined a comparative analysis of the effect of government spending in selected sectors on job creation from 1981 to 2018. The study was induced by the deficient and instability in federal government budgetary portions to some critical sectors such as agriculture, education; and health sectors that tend to prompt the neglect of agricultural sector, deterioration in the academic standard as well as decay in the health care service. Thus, time series data were collected from CBN bulletin from 1981-2018 on variables such as job creation proxy by employment rate, capital and recurrent government expenditure on agriculture, education, and health, sectors. The co-integration and ECM methods were used for the analysis. The ADF unit root, Johansen cointegraton test demonstrated that all the variables were stationary and have long run relationship. The results of the parsimonious error correction model in Model I the R2 of 66% revealed that the model has a good fit, R2 of 66%. The coefficients of capital spending in the agricultural, education and health sectors were positively and significantly impacted on job creation. In Model II, the R2 of 58% demonstrated that the model is a good fit. The coefficient of government recurrent expenditure in the agricultural sector is negatively and significantly impacted on job creation at 5 percent level. Also, the coefficient of government recurrent expenditure in the education sector is positively signed and statistically significant with job creation at 5 percent level. Also, government recurrent expenditure in the health sector is positively signed but statistically not significant with job creation at 5 percent level. In view of the discoveries, the study suggested that legislature ought to guarantee infrastructural development through increment in yearly capital spending so as to expand the degree of job/employment creation in Nigeria. Government should intensify effort in improving on the budgetary allocations to the se critical sectors in order to create jobs.