Finding a recipe that unlocks rapid growth and job creation should be the priority of emerging economies. Several theories of growth, employment and wage determination were efficient for certain economies at different periods, but not for other emerging economies like Nigeria. This study presents the Labour-Entrepreneurship Substitution mechanism as an idealistic model of growth, employment and wage determination. It is uniquely designed to accumulate capital, substitute labour for entrepreneurship as prospective supply of labour grows beyond its initial level, boost employment and output via new investments. Error correction mechanism of Autoregressive least square technique was used to measure the influence of labour-entrepreneurship substitution rate on the ‘new investment’, and the t-statistics, adopting Benferron’s multiple comparison adjusted probabilities was further used to measure the significance of the ‘new investment’ in determining gross domestic product in Nigeria. The labour-entrepreneurship substitution rate showed significant and positive impact on the new investment as the new investment also showed significant and positive impact on economic growth in Nigeria. Emerging and developed countries should develop the labour-entrepreneurship substitution as this will increase investment and output while creating full employment in the country.
Human capital development in technical vocational education (tve) for sustain...Alexander Decker
This document discusses human capital development in technical vocational education for sustainable national development in Nigeria. It makes three key points:
1. Technical vocational education plays an important role in human capital development by developing skills that increase productivity and employability, which supports sustainable economic growth and national development.
2. For technical vocational education to effectively contribute to human capital development, institutions must be well-equipped with infrastructure, workshop facilities, and qualified teachers to ensure graduates acquire skills for gainful employment.
3. Nigeria has faced challenges in technical vocational education like insufficient facilities and teachers, but it remains an important way to reduce unemployment and poverty through skills training.
11.human capital development and economic growth in nigeriaAlexander Decker
1) The document discusses human capital development and economic growth in Nigeria. It analyzes the relationship between investments in education, health, and skills training (proxies for human capital) and GDP (a proxy for economic growth).
2) The analysis finds a strong positive relationship between human capital development and economic growth in Nigeria. However, Nigeria still struggles with high illiteracy, unskilled workers, and uneven distribution of skilled labor.
3) To promote continued economic growth, the document recommends that Nigeria evolve more effective strategies for developing skills and capabilities across its population. It also calls for improved institutions to align training with the needs of different economic sectors.
Economic growth and human development effect of globalization in nigeria evid...Alexander Decker
This document summarizes an article that empirically investigates the effect of globalization on economic growth and human development in Nigeria from 1999-2011. It uses regression analysis to examine how trade openness, financial openness, and migration have impacted economic growth and human development. The analysis found that globalization has had a more significant effect on economic growth than human development. Trade and financial openness were found to have significant negative effects on economic growth and human development, while net migration rate had a positive effect on economic growth and human development, though the effect on human development was insignificant. The findings suggest exercising caution in embracing liberalization policies and mitigating their negative impacts through diversifying exports, strengthening institutions, and reviving industries.
This document examines the impact of capital accumulation on labor productivity growth in Nigeria from 1970-2014. It finds that:
1) Education and health expenditures' impact on labor productivity growth depends on the time period, while health expenditures positively impact productivity and compensation to employees negatively impacts it.
2) Both physical and human capital accumulation in Nigeria have been volatile and generally low over the study period, constraining productivity and output growth.
3) The determinants of labor productivity growth examined include human capital accumulation, physical capital accumulation, real wages, and technology, based on endogenous growth and efficiency wage theories.
The document discusses China's economic rise and examines factors contributing to its high growth rates. It finds that in contrast to following a Soviet model based on rapid input growth, China's growth has been led primarily by productivity increases, achieving a rate of 3.9% annually from 1979-1994 compared to 0.4% for the US in that period. This productivity-led growth is seen as more sustainable. China is analyzed as having elements of an East Asian developmental state model, including maintaining a large state sector and controlling financial institutions, while allowing private sector growth. Its future trajectory is uncertain but it differs from past East Asian models in the timing of reforms.
Human capital development and economic growth in nigeriaAlexander Decker
1. The study evaluates the relationship between human capital development and economic growth in Nigeria using data from 1977-2011.
2. The results of the analysis show there is a strong positive relationship between primary school enrollment, life expectancy, and economic growth (proxied by GDP). However, public expenditure on education has a negative impact on economic growth.
3. The findings suggest that investments in education and health can promote economic growth by increasing labor productivity. However, Nigeria needs to improve how it utilizes expenditures on education to achieve quality education and maximize its impact on the economy.
This document analyzes structural changes in employment in India over the past decade using employment data from 1999-2000, 2004-2005, and 2009-2010. Some key findings include:
1) While the share of agriculture in GDP declined, over half the workforce is still engaged in agriculture, producing only 15% of GDP.
2) Manufacturing employment increased 12 million from 2000-2005 but then declined 5 million from 2005-2010, resulting in little overall growth.
3) Non-manufacturing, especially construction, drove employment growth as infrastructure investment increased.
4) Services grew employment 18.6 million from 2000-2005 but only 3.5 million from 2005-2010, despite being the
Human capital development in technical vocational education (tve) for sustain...Alexander Decker
This document discusses human capital development in technical vocational education for sustainable national development in Nigeria. It makes three key points:
1. Technical vocational education plays an important role in human capital development by developing skills that increase productivity and employability, which supports sustainable economic growth and national development.
2. For technical vocational education to effectively contribute to human capital development, institutions must be well-equipped with infrastructure, workshop facilities, and qualified teachers to ensure graduates acquire skills for gainful employment.
3. Nigeria has faced challenges in technical vocational education like insufficient facilities and teachers, but it remains an important way to reduce unemployment and poverty through skills training.
11.human capital development and economic growth in nigeriaAlexander Decker
1) The document discusses human capital development and economic growth in Nigeria. It analyzes the relationship between investments in education, health, and skills training (proxies for human capital) and GDP (a proxy for economic growth).
2) The analysis finds a strong positive relationship between human capital development and economic growth in Nigeria. However, Nigeria still struggles with high illiteracy, unskilled workers, and uneven distribution of skilled labor.
3) To promote continued economic growth, the document recommends that Nigeria evolve more effective strategies for developing skills and capabilities across its population. It also calls for improved institutions to align training with the needs of different economic sectors.
Economic growth and human development effect of globalization in nigeria evid...Alexander Decker
This document summarizes an article that empirically investigates the effect of globalization on economic growth and human development in Nigeria from 1999-2011. It uses regression analysis to examine how trade openness, financial openness, and migration have impacted economic growth and human development. The analysis found that globalization has had a more significant effect on economic growth than human development. Trade and financial openness were found to have significant negative effects on economic growth and human development, while net migration rate had a positive effect on economic growth and human development, though the effect on human development was insignificant. The findings suggest exercising caution in embracing liberalization policies and mitigating their negative impacts through diversifying exports, strengthening institutions, and reviving industries.
This document examines the impact of capital accumulation on labor productivity growth in Nigeria from 1970-2014. It finds that:
1) Education and health expenditures' impact on labor productivity growth depends on the time period, while health expenditures positively impact productivity and compensation to employees negatively impacts it.
2) Both physical and human capital accumulation in Nigeria have been volatile and generally low over the study period, constraining productivity and output growth.
3) The determinants of labor productivity growth examined include human capital accumulation, physical capital accumulation, real wages, and technology, based on endogenous growth and efficiency wage theories.
The document discusses China's economic rise and examines factors contributing to its high growth rates. It finds that in contrast to following a Soviet model based on rapid input growth, China's growth has been led primarily by productivity increases, achieving a rate of 3.9% annually from 1979-1994 compared to 0.4% for the US in that period. This productivity-led growth is seen as more sustainable. China is analyzed as having elements of an East Asian developmental state model, including maintaining a large state sector and controlling financial institutions, while allowing private sector growth. Its future trajectory is uncertain but it differs from past East Asian models in the timing of reforms.
Human capital development and economic growth in nigeriaAlexander Decker
1. The study evaluates the relationship between human capital development and economic growth in Nigeria using data from 1977-2011.
2. The results of the analysis show there is a strong positive relationship between primary school enrollment, life expectancy, and economic growth (proxied by GDP). However, public expenditure on education has a negative impact on economic growth.
3. The findings suggest that investments in education and health can promote economic growth by increasing labor productivity. However, Nigeria needs to improve how it utilizes expenditures on education to achieve quality education and maximize its impact on the economy.
This document analyzes structural changes in employment in India over the past decade using employment data from 1999-2000, 2004-2005, and 2009-2010. Some key findings include:
1) While the share of agriculture in GDP declined, over half the workforce is still engaged in agriculture, producing only 15% of GDP.
2) Manufacturing employment increased 12 million from 2000-2005 but then declined 5 million from 2005-2010, resulting in little overall growth.
3) Non-manufacturing, especially construction, drove employment growth as infrastructure investment increased.
4) Services grew employment 18.6 million from 2000-2005 but only 3.5 million from 2005-2010, despite being the
Funding of small scale development agencies in nigeriaAlexander Decker
The document discusses funding of Industrial Development Centres (IDCs) in Nigeria. IDCs were established by the Federal Government to provide assistance to small-scale businesses. The study assessed whether 12 selected IDCs across Nigeria's four zones received adequate funding to carry out their roles from 1990-1999. The results showed that each IDC received less than 50% of its required funding during this period. For example, in the North Central/Western zone, the three IDCs combined received 54.21% of their total funding requirement. To address inadequate funding, the document recommends IDCs diversify their sources of funding.
This document discusses entrepreneurs as the creative force in the economy and how governments can help or hinder them. It defines entrepreneurship and notes that entrepreneurs drive innovation and economic growth. However, they face challenges from business environment factors like government policies. The document examines how the Nigerian government has implemented programs to support entrepreneurs through training and loans to foster job creation and economic development, but still presents hindrances such as high interest rates and lack of basic infrastructure. It concludes that while support is given, more must be done to reduce barriers facing entrepreneurs.
An Eclectic Theory of Entrepreneurship: Three level analysis for developing E...Dr.Nasir Ahmad
The study was intended to recommend guidelines for developing entrepreneurship
policy in Pakistan. For this purpose An Eclectic Theory of Entrepreneurship was used as
theoretical frame work to analyze empirical research studies and available reports at
three different levels. At micro level, low literacy rate was found to be foremost
requirement for developing entrepreneurship. Lack of knowledge based economic
system was found to be the center of problem at meso level. At macro level, core of the
problem is that policy makers need to understand the spirit of entrepreneurship to plan
economic policy accordingly. It was recommended that efforts may be made to: raise
education level and entrepreneurial orientation of the people; reshaping to knowledge
based economic system; and entrepreneurship may be designated as major pillar of
economic policy
The document summarizes Ethiopia's industrial policies under the current EPRDF regime since 1991. It discusses how the regime has implemented policies to strengthen the economy through an export-led industrialization strategy. Some of the key policies discussed include the Industrial Development Strategy (IDS) from 2002-2003, which aims to promote labor-intensive and export-oriented industries. IDS utilizes four main tools - stabilizing macroeconomic variables like inflation; creating a business friendly environment; building infrastructure; and providing support to competitive industries like flowers. While these policies have achieved some success, Ethiopia still faces challenges like high inflation, lack of foreign investment, and weak logistics sectors.
Graduate unemployment in nigeria entrepreneurship and venture capital nexusAlexander Decker
This document discusses graduate unemployment in Nigeria and proposes ways to address it through entrepreneurship and venture capital. It begins by outlining the high rates of unemployment in Nigeria, including graduate unemployment which accounts for 32% of total unemployment. It then advocates for establishing a venture capital bank to provide loans to unemployed graduates with business ideas to encourage entrepreneurship. Finally, it recommends that universities update their curricula to reflect employer needs and that the government improve infrastructure to support private sector growth and job creation.
1) The theory of balanced growth states that all sectors of the economy should grow simultaneously and harmoniously, requiring balance between demand and supply. Rosenstein-Rodan, Ragnar Nurkse, and Arthur Lewis advocated this approach.
2) Hirschman proposed unbalanced growth, arguing that strategic investments in selected industries or sectors would create new opportunities and stimulate further development. Investments in social overhead capital could encourage later private investments in directly productive activities.
3) Both balanced and unbalanced growth approaches have limitations, such as rising costs, shortages of resources, and difficulties for underdeveloped countries.
An Econometric Modeling of Development Process using Artificial Neural Networ...IJERDJOURNAL
This paper develops an econometric model of development in India using artificial neural networks. The model has two sub-models: 1) an economic model relating GDP to agriculture, industry, services and HDI and 2) a human development model relating HDI to education index, health index and GDP. The models are implemented using neural network tools in MATLAB. Validation results show coefficients above 0.99, indicating the models successfully capture the relationships between economic and human development indicators in India. The models can be used to estimate the impact of changes in economic sectors on GDP and HDI to inform policy planning.
This document provides an overview and summary of unemployment in India presented by Abhishek Agrawal. It begins with defining unemployment and noting India's large unemployment and poverty issues. It then discusses different types of unemployment including frictional, voluntary, casual, chronic, seasonal, disguised, structural, cyclical, and technological unemployment. It also examines the nature of unemployment in India including industrial, urban, rural, educated and disguised unemployment. The document outlines ways to measure unemployment and concludes by reviewing some of the key causes of unemployment in India such as jobless growth, increasing labor force, inappropriate technology, and educational system.
Nehru's economic policies and the challenges of globalizationDayamani Surya
Nehru's economic policies failed because he could not build institutions and organizational structures to implement his vision or policies or to mobilize the people behind them; he created no social instruments and this led to a general weakness in execution of his policies and ideas, and was a major reason for the shortcomings in the implementation of the land reforms, the execution of the Community Development programme and the management of the public sector.
A critical flaw of Nehru’s strategy of consolidation of the Indian nation, economic development and social transformation flowed from his non-adherence to the Gandhian strategy of non-violent struggle in one crucial aspect and its emphasis on the mobilization of the people.
1. The document discusses the theories of balanced and unbalanced economic growth. It describes Rosenstein-Rodan's "big push" theory of balanced growth, which argues for coordinated investment across multiple industries to generate demand.
2. Nurkse's version of balanced growth stresses balancing investment between sectors to avoid bottlenecks. Hirschman's theory of unbalanced growth proposes strategically investing in certain industries to stimulate growth in other sectors through linkages.
3. Hirschman categorized investment as either social overhead capital or direct productive activities and argued that underdeveloped countries should initially focus on one type, which would then stimulate the other.
Theories and models for Regional planning and developmentKamlesh Kumar
This is a work on the major theories of Regional planning mainly consisting the work of Francois Perroux, Gunnar Myrdal, Albert O. Hirschman, Walter Whitman Rostow and John Friedman.
The document discusses the importance of investing in human capital for economic development. It defines the Human Capital Index as a measure of productivity based on health and education indicators. The document also notes that while physical capital investment is important, human capital investment through education and health is more crucial. Finally, it states that technological change is affecting employment by creating new jobs and changing existing ones, so governments need to prepare workers through training and social protections to ensure no one is left behind.
The document discusses 4 key factors that influence a country's economic growth: investment in human capital through education and training; investment in capital goods like factories and machinery; natural resources available in the country; and entrepreneurship. It states that the presence of these factors determines a country's GDP and that GDP is the primary measure of a country's economic growth.
The Industrial Disputes Act extends to all of India and applies to all industrial establishments regardless of employment size. It covers all employees, including contract laborers and apprentices, who perform manual, clerical, skilled, unskilled, technical, operational or supervisory work. However, it does not apply to persons in managerial/administrative roles or those earning over 10,000 rupees per month. The Act defines key terms related to industrial relations and disputes.
South Asian countries have experienced economic growth in recent decades but it has not been inclusive or sustainable. Poverty remains high at around 40% due to a lack of investment in human capital like education and health. Social spending as a percentage of GDP is lower in South Asia than in Sub-Saharan Africa. For growth to be inclusive and sustainable, South Asian countries need reforms like improving governance, boosting regional connectivity and cooperation, investing in people, and liberalizing trade and mobility. Civil society will need to advocate for these reforms to realize the promise of inclusive growth across South Asia.
The document provides information about Naseem Shahzad and their educational qualifications. It then summarizes Lewis's two-sector model of economic development and Rostow's stages of economic growth model.
The Lewis model explains how economic growth is initiated through a structural shift as the industrial sector grows relative to subsistence agriculture. It focuses on the transfer of surplus labor from the traditional to the industrial sector. Rostow identified five stages of economic growth: traditional society, preconditions for take-off, take-off, drive to maturity, and age of high mass consumption. Developing countries are typically in the early stages of traditional society or preconditions.
This document outlines the theory of balanced growth, which proposes that all sectors of an economy should grow simultaneously. It defines balanced growth as investments made across multiple industries to enlarge the market and incentivize further investment. The theory suggests balancing growth between agriculture and industry, human and physical capital, and domestic and foreign trade. Balanced growth provides benefits like inclusive development and optimal resource use, but critics argue it overlooks administrative challenges and resource constraints in underdeveloped countries.
ENTREPRENEURSHIP DEVELOPMENT AND UNEMPLOYMENT IN NIGERIAIJM Journal
A number of policy intermediations in Nigeria that were targeted at inspiring and stimulating entrepreneurship development through small and medium scale enterprises have botched. In its place of creating in-country entrepreneurial capacity, entrepreneurs have been converted and become distribution agents of imported goods. This paper argues the development of entrepreneurship and stressed that it has been instrumental in economic growth, balanced regional development and job creation in most vibrant economies, where technology is changing at a faster rate and the product lifetime cycle is dwindling. This paper also looks at Nigeria’s growing unemployment situation and how it increasingly deteriorates the potentials of the country. It emphasizes the prominence and significance of entrepreneurship as realistic machinery for sustainable economic growth and employment generation in Nigeria seeing the experiences of developed nations like Australia, the United States and vibrant economies like China and India.
Integration of Traditional Business School Models to Entrepreneurship Develop...ijtsrd
The document discusses integrating traditional business school models in Nigeria to promote entrepreneurship and job creation. It notes high unemployment in Nigeria and various past government programs that failed to address it. The paper advocates integrating the Igbo apprenticeship system, which is an informal entrepreneurial training model, to develop skills and foster entrepreneurship. It suggests bringing more of the informal sector into the formal economy with better policies and regulations. The apprenticeship system provides on-the-job training over many years and has proven effective in reducing poverty and empowering communities. The paper argues for incorporating current business opportunities into education to further promote entrepreneurship development and job creation in Nigeria.
Funding of small scale development agencies in nigeriaAlexander Decker
The document discusses funding of Industrial Development Centres (IDCs) in Nigeria. IDCs were established by the Federal Government to provide assistance to small-scale businesses. The study assessed whether 12 selected IDCs across Nigeria's four zones received adequate funding to carry out their roles from 1990-1999. The results showed that each IDC received less than 50% of its required funding during this period. For example, in the North Central/Western zone, the three IDCs combined received 54.21% of their total funding requirement. To address inadequate funding, the document recommends IDCs diversify their sources of funding.
This document discusses entrepreneurs as the creative force in the economy and how governments can help or hinder them. It defines entrepreneurship and notes that entrepreneurs drive innovation and economic growth. However, they face challenges from business environment factors like government policies. The document examines how the Nigerian government has implemented programs to support entrepreneurs through training and loans to foster job creation and economic development, but still presents hindrances such as high interest rates and lack of basic infrastructure. It concludes that while support is given, more must be done to reduce barriers facing entrepreneurs.
An Eclectic Theory of Entrepreneurship: Three level analysis for developing E...Dr.Nasir Ahmad
The study was intended to recommend guidelines for developing entrepreneurship
policy in Pakistan. For this purpose An Eclectic Theory of Entrepreneurship was used as
theoretical frame work to analyze empirical research studies and available reports at
three different levels. At micro level, low literacy rate was found to be foremost
requirement for developing entrepreneurship. Lack of knowledge based economic
system was found to be the center of problem at meso level. At macro level, core of the
problem is that policy makers need to understand the spirit of entrepreneurship to plan
economic policy accordingly. It was recommended that efforts may be made to: raise
education level and entrepreneurial orientation of the people; reshaping to knowledge
based economic system; and entrepreneurship may be designated as major pillar of
economic policy
The document summarizes Ethiopia's industrial policies under the current EPRDF regime since 1991. It discusses how the regime has implemented policies to strengthen the economy through an export-led industrialization strategy. Some of the key policies discussed include the Industrial Development Strategy (IDS) from 2002-2003, which aims to promote labor-intensive and export-oriented industries. IDS utilizes four main tools - stabilizing macroeconomic variables like inflation; creating a business friendly environment; building infrastructure; and providing support to competitive industries like flowers. While these policies have achieved some success, Ethiopia still faces challenges like high inflation, lack of foreign investment, and weak logistics sectors.
Graduate unemployment in nigeria entrepreneurship and venture capital nexusAlexander Decker
This document discusses graduate unemployment in Nigeria and proposes ways to address it through entrepreneurship and venture capital. It begins by outlining the high rates of unemployment in Nigeria, including graduate unemployment which accounts for 32% of total unemployment. It then advocates for establishing a venture capital bank to provide loans to unemployed graduates with business ideas to encourage entrepreneurship. Finally, it recommends that universities update their curricula to reflect employer needs and that the government improve infrastructure to support private sector growth and job creation.
1) The theory of balanced growth states that all sectors of the economy should grow simultaneously and harmoniously, requiring balance between demand and supply. Rosenstein-Rodan, Ragnar Nurkse, and Arthur Lewis advocated this approach.
2) Hirschman proposed unbalanced growth, arguing that strategic investments in selected industries or sectors would create new opportunities and stimulate further development. Investments in social overhead capital could encourage later private investments in directly productive activities.
3) Both balanced and unbalanced growth approaches have limitations, such as rising costs, shortages of resources, and difficulties for underdeveloped countries.
An Econometric Modeling of Development Process using Artificial Neural Networ...IJERDJOURNAL
This paper develops an econometric model of development in India using artificial neural networks. The model has two sub-models: 1) an economic model relating GDP to agriculture, industry, services and HDI and 2) a human development model relating HDI to education index, health index and GDP. The models are implemented using neural network tools in MATLAB. Validation results show coefficients above 0.99, indicating the models successfully capture the relationships between economic and human development indicators in India. The models can be used to estimate the impact of changes in economic sectors on GDP and HDI to inform policy planning.
This document provides an overview and summary of unemployment in India presented by Abhishek Agrawal. It begins with defining unemployment and noting India's large unemployment and poverty issues. It then discusses different types of unemployment including frictional, voluntary, casual, chronic, seasonal, disguised, structural, cyclical, and technological unemployment. It also examines the nature of unemployment in India including industrial, urban, rural, educated and disguised unemployment. The document outlines ways to measure unemployment and concludes by reviewing some of the key causes of unemployment in India such as jobless growth, increasing labor force, inappropriate technology, and educational system.
Nehru's economic policies and the challenges of globalizationDayamani Surya
Nehru's economic policies failed because he could not build institutions and organizational structures to implement his vision or policies or to mobilize the people behind them; he created no social instruments and this led to a general weakness in execution of his policies and ideas, and was a major reason for the shortcomings in the implementation of the land reforms, the execution of the Community Development programme and the management of the public sector.
A critical flaw of Nehru’s strategy of consolidation of the Indian nation, economic development and social transformation flowed from his non-adherence to the Gandhian strategy of non-violent struggle in one crucial aspect and its emphasis on the mobilization of the people.
1. The document discusses the theories of balanced and unbalanced economic growth. It describes Rosenstein-Rodan's "big push" theory of balanced growth, which argues for coordinated investment across multiple industries to generate demand.
2. Nurkse's version of balanced growth stresses balancing investment between sectors to avoid bottlenecks. Hirschman's theory of unbalanced growth proposes strategically investing in certain industries to stimulate growth in other sectors through linkages.
3. Hirschman categorized investment as either social overhead capital or direct productive activities and argued that underdeveloped countries should initially focus on one type, which would then stimulate the other.
Theories and models for Regional planning and developmentKamlesh Kumar
This is a work on the major theories of Regional planning mainly consisting the work of Francois Perroux, Gunnar Myrdal, Albert O. Hirschman, Walter Whitman Rostow and John Friedman.
The document discusses the importance of investing in human capital for economic development. It defines the Human Capital Index as a measure of productivity based on health and education indicators. The document also notes that while physical capital investment is important, human capital investment through education and health is more crucial. Finally, it states that technological change is affecting employment by creating new jobs and changing existing ones, so governments need to prepare workers through training and social protections to ensure no one is left behind.
The document discusses 4 key factors that influence a country's economic growth: investment in human capital through education and training; investment in capital goods like factories and machinery; natural resources available in the country; and entrepreneurship. It states that the presence of these factors determines a country's GDP and that GDP is the primary measure of a country's economic growth.
The Industrial Disputes Act extends to all of India and applies to all industrial establishments regardless of employment size. It covers all employees, including contract laborers and apprentices, who perform manual, clerical, skilled, unskilled, technical, operational or supervisory work. However, it does not apply to persons in managerial/administrative roles or those earning over 10,000 rupees per month. The Act defines key terms related to industrial relations and disputes.
South Asian countries have experienced economic growth in recent decades but it has not been inclusive or sustainable. Poverty remains high at around 40% due to a lack of investment in human capital like education and health. Social spending as a percentage of GDP is lower in South Asia than in Sub-Saharan Africa. For growth to be inclusive and sustainable, South Asian countries need reforms like improving governance, boosting regional connectivity and cooperation, investing in people, and liberalizing trade and mobility. Civil society will need to advocate for these reforms to realize the promise of inclusive growth across South Asia.
The document provides information about Naseem Shahzad and their educational qualifications. It then summarizes Lewis's two-sector model of economic development and Rostow's stages of economic growth model.
The Lewis model explains how economic growth is initiated through a structural shift as the industrial sector grows relative to subsistence agriculture. It focuses on the transfer of surplus labor from the traditional to the industrial sector. Rostow identified five stages of economic growth: traditional society, preconditions for take-off, take-off, drive to maturity, and age of high mass consumption. Developing countries are typically in the early stages of traditional society or preconditions.
This document outlines the theory of balanced growth, which proposes that all sectors of an economy should grow simultaneously. It defines balanced growth as investments made across multiple industries to enlarge the market and incentivize further investment. The theory suggests balancing growth between agriculture and industry, human and physical capital, and domestic and foreign trade. Balanced growth provides benefits like inclusive development and optimal resource use, but critics argue it overlooks administrative challenges and resource constraints in underdeveloped countries.
ENTREPRENEURSHIP DEVELOPMENT AND UNEMPLOYMENT IN NIGERIAIJM Journal
A number of policy intermediations in Nigeria that were targeted at inspiring and stimulating entrepreneurship development through small and medium scale enterprises have botched. In its place of creating in-country entrepreneurial capacity, entrepreneurs have been converted and become distribution agents of imported goods. This paper argues the development of entrepreneurship and stressed that it has been instrumental in economic growth, balanced regional development and job creation in most vibrant economies, where technology is changing at a faster rate and the product lifetime cycle is dwindling. This paper also looks at Nigeria’s growing unemployment situation and how it increasingly deteriorates the potentials of the country. It emphasizes the prominence and significance of entrepreneurship as realistic machinery for sustainable economic growth and employment generation in Nigeria seeing the experiences of developed nations like Australia, the United States and vibrant economies like China and India.
Integration of Traditional Business School Models to Entrepreneurship Develop...ijtsrd
The document discusses integrating traditional business school models in Nigeria to promote entrepreneurship and job creation. It notes high unemployment in Nigeria and various past government programs that failed to address it. The paper advocates integrating the Igbo apprenticeship system, which is an informal entrepreneurial training model, to develop skills and foster entrepreneurship. It suggests bringing more of the informal sector into the formal economy with better policies and regulations. The apprenticeship system provides on-the-job training over many years and has proven effective in reducing poverty and empowering communities. The paper argues for incorporating current business opportunities into education to further promote entrepreneurship development and job creation in Nigeria.
Using ICT Policy Framework as Panacea for Economic Recession and Instability ...AnthonyOtuonye
This document proposes an ICT-based strategic model for Nigeria to address its current economic recession. It begins with background on Nigeria's GDP decline in the first two quarters of 2016, confirming it is in recession. It then reviews literature on causes of recessions and proposed solutions for Nigeria, such as returning to agriculture or government spending cuts. However, the document argues for considering ICT's potential through initiatives like broadband expansion, e-governance, and ICT infrastructure development to create jobs, boost productivity and GDP. It develops a model linking ICT policy, entrepreneurship, broadband policy, and ICT in education to spur economic benefits. The document recommends full implementation of this ICT-driven model for Nigeria to facilitate quick
The United States Is Known To Have The Largest ImmigrationDawn Robertson
The document discusses three main effects of immigration on the US economy. First, immigrants help increase economic productivity by taking jobs that complement those of US workers. This allows businesses like farms to expand. Second, immigrants open new businesses that create jobs for US workers. Studies show immigration raises wages for native-born workers. Third, while some argue immigrants take jobs, they also expand the labor supply and demand for housing, food and goods, creating more jobs. Overall, economists believe immigration provides long-term benefits to the economy, though some argue short-term losses may occur.
THE ROLE OF ENTREPRENEURSHIP IN ECONOMIC DEVELOPMENT OF NIGERIANAJHSSR Journal
: Entrepreneurial industries was selected one from each Geo political zone in Nigeria with
population of 387 on the whole descriptive survey design was used and correlation coefficient was used in
determining the relationship between these variable and economic development in Nigeria. Entrepreneurship, all
over the world is acclaimed as a significant factor in economic development. Entrepreneurship does not only
increase per capital income it also increases factor utilization. It is also a veritable change agent of the structure
of business and society. As a change agent it acts as a catalyst for the generation of new ideas, products,
methods of production and the distribution of the products so produced. The jobs created, the new technologies
developed, the improved production method, the increase in output both in terms of quantity and quality are all
the ingredients for economic growth and development. The paper has explored the roles of entrepreneurship at
different sectors of the economy. In carrying out the research this paper is of the view that because of the
capacity of entrepreneurship to generate increased output, its ability to create jobs through formation of new
enterprises, to facilitate transfer of technology or adoption of technology, to invigorate large scale enterprises, to
harness resources, that might otherwise be latent and to stimulate growth in those sectors which supply it with
input; because it is able to encourage and sustain economic dynamism that enables a country to adjust
successfully in a rapidly changing global economy, entrepreneurial development is a sine qua non in the
development of any country especially, a developing country. Conclusion were made and the study
recommended that more job opportunity will be created policies strengthened, environment should be improved
for financing and investment welcomed.
Small–medium enterprise formation and nigerian economic growthYing wei (Joe) Chou
This document discusses small-medium enterprises (SMEs) and their relationship to economic growth in Nigeria. It provides background on SMEs in Nigeria, noting they account for a large share of employment and output but the country still faces high unemployment, poverty, and low human development. The paper reviews literature on the importance of SMEs in creating jobs, innovation, and knowledge transfer. It also discusses theories of entrepreneurship and entrepreneurial development. The purpose is to empirically examine the link between SME formation, employment, and economic growth in Nigeria using statistical techniques like error correction modeling and cointegration testing.
Small–medium enterprise formation and nigerian economic growthYing wei (Joe) Chou
This document examines the relationship between small-medium enterprise (SME) formation and economic growth in Nigeria. It finds that while the number of SMEs in Nigeria has increased, leading to some economic growth, an increase in micro, small and medium enterprises has not contributed as much to development as existing businesses. The employment created by new SMEs has been the most important factor driving economic growth and reducing unemployment. The paper uses an error correction model approach to analyze how persistent increases in SME formation can improve Nigeria's economic growth and development over the long run.
The Role of IT in Supporting Vietnam Youth Entrepreneurshipijtsrd
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Labour-Entrepreneurship Substitution Mechanism: Determining Growth, Employment and Wage in Nigeria
1. International Journal of Advanced Engineering, Management and Science (IJAEMS) [Vol-3, Issue-6, Jun- 2017]
https://dx.doi.org/10.24001/ijaems.3.6.2 ISSN: 2454-1311
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Labour-Entrepreneurship Substitution
Mechanism: Determining Growth, Employment
and Wage in Nigeria
Chimaobi Valentine Okolo, Nicholas Attamah (Ph.D)
Department of Economics, Coal City University, Enugu, Nigeria
Department of Economics, Enugu State University of Science and Technology, Enugu, Nigeria
Abstract— Finding a recipe that unlocks rapid growth and
job creation should be the priority of emerging economies.
Several theories of growth, employment and wage
determination were efficient for certain economies at
different periods, but not for other emerging economies like
Nigeria. This study presents the Labour-Entrepreneurship
Substitution mechanism as an idealistic model of growth,
employment and wage determination. It is uniquely designed
to accumulate capital, substitute labour for
entrepreneurship as prospective supply of labour grows
beyond its initial level, boost employment and output via
new investments. Error correction mechanism of
Autoregressive least square technique was used to measure
the influence of labour-entrepreneurship substitution rate on
the ‘new investment’, and the t-statistics, adopting
Benferron’s multiple comparison adjusted probabilities was
further used to measure the significance of the ‘new
investment’ in determining gross domestic product in
Nigeria. The labour-entrepreneurship substitution rate
showed significant and positive impact on the new
investment as the new investment also showed significant
and positive impact on economic growth in Nigeria.
Emerging and developed countries should develop the
labour-entrepreneurship substitution as this will increase
investment and output while creating full employment in the
country.
Keywords—Employment, entrepreneurship, growth,
labour, substitution, wage.
I. INTRODUCTION
Economic meltdown is usually characterized by decline in
output, employment, standard of living and a rise in poverty
level and hunger. This was evidenced in the great depression
that followed the World War II, the global economic
meltdown of 2008/2009 etc. Smart policy makers such as
Lord Meynard Keynes, Rev. Thomas Malthus and others
worked hard to forestall such circumstances through the
formulation of theories tailored to suit their economies.
Unfortunately, this is not the case in Nigeria. The Nigerian
economy has witnessed several recessions (SAP induced
recession in 1986, Global economic meltdown in 2008/2009,
and the current recession of the Muhamadu Buhari led
Administration), yet its policy makers have not carefully
articulated steps to model a pathway to sustained economic
growth and development, and where smart policies, such as
‘NEEDS’ were developed, successive governments
discontinue those policies for their selfish plans. On the
contrary, according to BGL Research and Intelligence
economic note (2011), when David Cameron admitted that
the UK unemployment rate is disappointingly high, he
indicated that his government desires to see faster growth in
the economy. He maintained a certain level of continuity of
his predecessor’s policies. Although he took it for granted
that when growth improves jobs are created, specific
theories and policies should focus on output and
employment generation. Similarly, leaders in developed and
emerging economies have their eyes on the GDP growth
figure as the leading indicator to decline in poverty
incidence through reduced unemployment, increased
household income and reduced inequality (BGL Research
and Intelligence, 2011).
Despite the impressive economic growth over the last 10
years in Nigeria, unemployment and the incidence of
poverty has worsened since the year 2004 (BGL Research
and Intelligence, 2011). Nigerian economic statistics reveal
a puzzling contrast between rapid economic growth and
quite minimal welfare improvements for much of the
population (World Bank, 2013). According to the bank,
annual growth rates that average over 7% in official data
during the last decade place Nigeria among the fastest
growing economies in the world, while poverty reduction
and job creation have not kept pace with population growth,
2. International Journal of Advanced Engineering, Management and Science (IJAEMS) [Vol-3, Issue-6, Jun- 2017]
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implying social distress for an increasing number of
Nigerians.
Unemployment and underemployment has remained a major
development challenge and an intractable problem facing
most emerging economies, with ramifications for economic
welfare, social stability and human dignity (Federal Ministry
of Employment Labour and Productivity, 2003). According
to the ministry, the employment and poverty challenges
facing Nigeria are quite critical and there is an increasing
awareness at all levels of Government, employer’s and
workers’ organizations, of the urgent need for adequate
responses and comprehensive approach to address the
problems. World Bank (2013) strongly recommends that
Nigeria finds a recipe to unlock rapid growth and job
creation in a larger part of the country. Therefore, the
objective of this study is to present the recipe that unlocks
rapid growth and job creation (an Ideal pathway to boost
output and employment) in emerging economies. The
second section discusses the “Idealistic (mixed economy)
theory of growth, employment and wage, section three, the
methodology, section four discussion of findings, while the
conclusion is presented in section five.
II. AN IDEALISTIC THEORY OF OUTPUT AND
EMPLOYMENT
a. Assumptions:
i. Labour mobility is controlled. Workers do not
easily switch jobs. Therefore, there is no frictional
unemployment.
ii. Workers substitute labour for entrepreneurship
(LEs).
iii. Workers utilize some form of gratuity (kY),
wage-income savings (wY), credits (c), and tax
incentives (t) to raise capital (K) for investments
[Financial and real investments].
iv. Workers increase earnings via financial
investment (r) or real investment (π) or both (r,
π).
v. Financial investors (FI) supply additional capital
(K) for real investments (RI).
vi. Job matching is handled by an institution of
government, controlling the activities of unions of
labour and employers.
vii. Unions exist but they lack independent power to
match labour to suited jobs. However, they have
full power to restrict job switch to relevant sectors
for non members. They also provide suitable
labour for job vacancies and vice versa.
viii. Each category of labour belongs to a union of
persons with peculiar skill and abilities.
ix. Wage is determined by the interaction of labour
supply and demand, and government (government
determines the minimum wage, salaries of
government policy makers and enforcers).
x. Employers cannot easily lay off workers without
paying some form of gratuity to laid off worker.
xi. Technology complements labour. Technology
here refers to the advancement in (or development
of) capital intensive method of production (plants,
machineries, computers, internets etc.)
Government controls the technology-labour
substitution rate.
xii. Assumptions (i), (ii), (iii), (v), (vi), (x), and (xi)
adjust to keep working population growth (labour
supply) always lower than growth in investment.
xiii. All agents are rationale (i.e. they all act in their
individual best interest).
xiv. There is no restriction to international trade and
flow of capital (XcMc). Real investors exploit
international product market, while financial
investors make international financial investments
with relatively better credit rates. Firms’ output
and profit extends also to their ability to utilize
internal market opportunities.
xv. Government implements progressive tax system.
xvi. Government utilizes tax revenues to compensate
for changes in credit rates (iG) for new
entrepreneurships in the short-run, and for
expansionary objectives (oG)
xvii. This is a short-run model for period less than or
equal to ten (10) years.
xviii. Senior and more experienced workers leave
employment before new workers. New workers
take longer time to build capital from savings.
xix. There is always a match (technology or labour)
for every vacancy.
xx. Government has perfect knowledge of vacancies
and qualified persons. Therefore, no time is spent
searching for job or qualified labour.
xxi. Previous year investment income (IYt-1) influence
current year’s earnings (rt, πt) via savings (s).
xxii. Government is an insignificant employer. The
private sector absorbs the crux of the labour force.
xxiii. Government imposes workers’ welfare policies on
employers.
xxiv. Labour is highly specialized. Workers cannot
switch to another kind of job or sector without
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training/learning, which takes time (formally or
informally). There is no on-the-job training.
xxv. Entrepreneurship drives labour demand (Ld).
xxvi. Population growth (g) drives labour supply (Ls).
xxvii. Supply causes demand in the labour market.
b. Earnings in the Labour-Entrepreneurship
Substitution Mechanism
Here, we consider an ideal mixed economy model such as
Nigeria, which is driven by the private sector and the
government.
Therefore, earning on financial investment in the economy is
modeled thus;
r = f [sY(k, w, It-1), t, δ, XcMc] (2.1)
Where, r = interest earning; s = savings; kY,wY = income
from contract and wage respectively; t = tax incentive, δ =
depreciation [-ve] or appreciation [+ve] of money value (for
financial investment, δ could be –ve or +ve given the time
value of money [inflation]), IYt-1 = previous year income,
and XcMc = net international fund flows.
To make it linear,
r = skY + swY + sIYt-1 + t ± δ + XcMc (2.1.1)
Earning from financial investment is determined by savings
from contract income, wage income, previous year
investment income, tax incentive to new financial
investments (government decision to encourage new
entrepreneurs by reducing or implementing a zero tax policy
in the short-run), depreciation or appreciation of money
value, and investment in international financial markets. The
mechanism of adjusting the earning on financial investment
in the labour-entrepreneurship substitution model is to
increase savings on contract income, savings on wage
income, savings on previous investment income, tax
incentive on new financial investment, and increasing
investment international financial markets. This is further
explained in the equation below, using blue and red arrows;
r = skY(↑) + swY(↑) + sIYt-1(↑) + t(↑) + XcMc(↑) ± δ(↑↓)
(2.1.2)
Earning on real investment in is modeled thus;
π = f [sY(k, w, It-1), c, t, A, L, IE, δ, XcMc] (2.2)
Where, π = profit; s = savings; kY, wY, c and t = same as in
assumption (iii); IYt-1 = previous year income; A =
technology (the use of machines, computers, robots etc.); L
= labour; Ie = investment expenditure, δ = depreciation of
capital stock (for real investments), XcMc = international
trade balance.
To make it linear,
π = sYk + sYw + sIYt-1 + c + A + L + XcMc – δ – Ie
(2.2.2)
Earning from real investment derived from labour-
entrepreneurship substitution is determined by capital
accumulation savings from contract, wage, previous year
investment income, credit from bank, technological input,
labour, international real investment, depreciation of capital
stock, investment expenditure (such as interest on loan, tax,
expenses to acquire technology, and wage), and expenses
incurred on international trade.
Therefore,
π = sYk + sYw + sIYt-1 + c + A + L + XcMc – δ – e(A + L + t
+ Ii + XcMc) (2.2.3)
Expanding the equation,, we have;
π = sYk + sYw + sIYt-1 + c + A + L + XcMc – δ – eA – eL –
et – eIi + eXcMc (2.2.4)
Again this is a profit maximizing model for labour-
entrepreneurship substitution. It replicates some features of
classical model economy and Keynesian model economy.
The mechanism of adjusting the earning on real investment
in idealistic labour-entrepreneurship substitution model is
explained in the model below;
π = p[sYk(↑) + sYw(↑) + sIYt-1(↑) + c(↑) + A(↑) + L(↑) +
XcMc(↑)] – δ (↓) – e(A + L + t + Ii + XcMc) (↓) (2.2.5)
Where,
sYk + sYw + sIYt-1 ± δ = K (capital accumulation by
financial investor) (2.2.6)
sYk + sYw + sIYt-1 + c – δ = K (capital accumulation by real
investor) (2.2.7)
Hence, Y = K + A + L, and R = pY. Where, Y is output, and
p = price,
R = p(K + A + L + XcMc) (2.3)
Therefore,
π = R – e (2.4)
Where, R = Revenue; e = Expenditure/Cost; and π = Profit.
In order to increase earning (π) at full employment of factor
inputs, the firm may increase price of goods or reduce cost
of factor inputs or try to maintain an optimal balance
between increased production and minimized cost, while
market price of goods remain stable. Firms’ revenue and
profit also extends to their ability to utilize internal market
opportunities.
c. Output in the Labour-Entrepreneurship
Substitution Mechanism
The idealistic economy model causes an increase in output,
driven by the labour-entrepreneurship substitution. The
theory explains that senior and more experienced workers
retire to entrepreneurship, having accumulated capital from
wage, contracts, credit from banks, and having favourable
policies from government. Some retire to financial
investments, supplying more capital for other workers who
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retire to real investment. This will increase aggregate output
and employment. The growth model below is a mixture of
Solow’s output model and Keynesian growth model.
Particular attention is given to the accumulation of capital
and specific government intervention in encouraging
investment in the financial and real sectors of the economy.
The model, which is effective in the short-run, explains
private sector factor inputs, government intervention in
private sector, government input in aggregate output, and the
international sector. The model is derived below;
IYL-E = f (K, A, L, G, XcMc) (2.5)
To make it linear,
IYL-E = K + A + L + G + XcMc (2.5.1)
Where, IYL-E = Output derived from labour-entrepreneurship
substitution; K = capital accumulated; A = Technology
(complements labour at a controlled rate); L = labour; and G
= government intervention in private sector; XcMc = net
international trade and capital flows. In (3.5), Investment
income (output) derived from labour-entrepreneurship
substitution depends on capital, technology, labour, and
government intervention. Capital is accumulated from
various income sources. The capital accumulation with
government intervention is a modification of (2.2.6) and
(2.2.7).
Therefore, government intervention modifies the model
thus;
K = sY(k + w + It-1) + iG + t ± δ (2.6.1)
K = sY(k + w + It-1) + c + iG – δ (2.6.2)
Furthermore, considering that a part of the international fund
flow is illegal (lIk) and does not depend on world and local
interest rates but generally, on the weakness of national
security, and specifically, the financial sector security. When
an increasing number of illegal businesses, such as drug
businesses, human trafficking, money laundering etc
emanate from a country, it could suggest a life style or value
system of a people. While this is detrimental on the
exploited nation, it forms capital accumulated for investment
in the host nation. Therefore, capital accumulation includes
the illegal funds, acquired from foreign countries and
invested in host country.
K = sY(k + w + It-1) + lIk + iG + t ± δ (2.6.3)
K = sY(k + w + It-1) + c + lIk + iG – δ (2.6.4)
Capital (K) is derived from savings from contract, wage and
previous year investment income, credit from bank and
government compensation of the change in credit rate and
depreciation of capital stock (for new real investments) and
tax subsidies and depreciation/ appreciation of money value
(for new financial investments). Equations (2.6.1) and
(2.6.2) explains government tax subsidy to encourage new
financial investment, and government compensation for
change in credit rate to encourage new real investment.
G = f (iG, oG) (2.7)
G = iG + oG (2.7.1)
Where, iG = government compensation for the change (if
any) in credit rate; oG = other government expenditures to
achieve desired macro objectives. The model therefore
becomes;
IYL-E = sY(k + w + It-1) + c + iG + t +A + L + oG + XcMc
(2.5.2)
Imputing the short-run time factor into the model;
IYL-E = sY(kt + wt + wt-n + It-1) + ct + ct-n ± δ + i(Gt + Gt-n - c)
+ tt + tt-n + At + At-n + Lt + oGt + XcMct (2.5.3)
Where, n ≤ 10 years [short-run period].
d. Employment and Wage Determination in the
Labour-Entrepreneurship Substitution Mechanism
The labour-entrepreneurship substitution mechanism is
designed to create vacancy in existing firms for the
increasing supply of labour as well as create new
entrepreneurship to absorb more labour. The market is not
saturated with competing entrepreneurships because
investors take advantage of the opportunities in the
international market to expand their coverage and sell their
products. This substitution mechanism shifts labour demand
curve outward, causing a shortfall in supply of labour. This
shortfall is complemented by advancement in technology
(which, according to assumption ‘xi’ is controlled by
government). When there is an outward in the supply of
working population, the mechanism works to bring the
market to equilibrium or in favour of labour supply over
demand. The mechanism gradually sets in as government
anticipates growth in population (labour supply).
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Fig. 1.
Fig. 1 shows wage determination and mobility of labour in
example A & B. Wage is determined by the interplay of
labour demand and supply. Notice that an outward shift in
labour supply (S1) in example B caused wage to decline from
initial equilibrium (e) to the new equilibrium (e1). However,
labour supply is less or equal to labour demand. His is
achieved by the labour-entrepreneurship substitution
mechanism. This decline in wage due to an outward shift in
labour supply may cause workers in sector (B) to desire to
move to sector (A), with higher wage (w1). Nevertheless,
they remain in their current employment until the
government institution matches them with suitable job
vacancy in the sector (A). Secondly, given that jobs require
specialization, requires training, which takes time, and the
fact that workers would have to start at a lower level
compared to his/her current position, discourages perfect
mobility of labour
Furthermore an outward shift in demand in sectors A or B
caused a shortfall in supply and a rise in wage level (w1).
This was complemented by technology advancement until
labour supply rose to (e1) in sector A and (e2) in sector B.
Note that the rate of technology substitution for labour is
influenced by government as priority is given to labour over
technology in the mechanism. This is also explained in the
model below;
E = f (g, I, LEs, iG, A, c) (2.8)
Employment in this mechanism is derived from population
growth (g), Investment (I), labour-entrepreneurship
substitution (LEs), government compensation for incremental
change in credit rate (iG), technological advancement (A),
and credit from bank (c). Labour-Entrepreneurship
substitution is further derived from interest earnings derived
from financial investments and investment income derived
from real investments (respectively derived from labour-
entrepreneurship substitution). This is shown below;
LEs = rYL-E + IYL-E (2.9)
Therefore, unemployment tends to zero if the following
conditions are satisfied;
U → 0 = g (↓) + I (↑) + LEs (↓) + iG (↓) + A (↑) + c (↓)
(2.8.1)
or
U → 0 = g (↑) + I (↑) + LEs (↑) + iG (↑) + A (↓) + c (↑)
(2.8.2)
Furthermore, wage is determined in the model below,
considering the assumption;
w = f [g, I, LEs, iG, A) (2.10)
The mechanism therefore is;
w (↑) = g (↓) + I (↑) + LEs (↓) + iG (↓) + A (↑)
(2.10.1)
or
w (↓) = g (↑) + I (↓) + LEs (↑) + iG (↑) + A (↓)
(2.10.2)
LEs + iG represent new investments. Population growth (g)
represents supply of labour; while investment level (I)
represents labour demand.
III. METHODOLOGY
Ex-post facto research design was used to measure the
impact of labour-entrepreneurship substitution rate on
investment (boosted by the substitution rate) in Nigeria [i.e.
the investment was derived as a function of interest rate and
substitution rate]. Error correction mechanism of an
Autoregressive least square technique was used to measure
the influence of labour-entrepreneurship substitution rate on
the ‘new investment’. The ‘new investment’ value (IL-E.S)
was tested for its determinant of economic growth in Nigeria
using the t-statistics, adopting Benferron’s multiple
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comparison adjusted probabilities and correlation analysis.
Prior to the test, the labour-entrepreneurship substitution rate
was determined by subtracting the growth rate of the gross
domestic product from the growth rate of total labour force.
The difference was added to the unemployment rate.
Therefore, the substitution rate is the rate at which
investment must grow beyond that, which is determined by
interest rate in order to clear unemployment and cause
growth in output in the country via the labour-
entrepreneurship substitution. This can also be considered
as the rate at which employed labour must substitute for
entrepreneurship/investment in order to create employment
and increase output.
Furthermore, the investment derived from labour-
entrepreneurship substitution mechanism (using the
substitution rate) was added to the original investment
derived as a function of interest rate to arrive at the new
investment scale (IL-E.S). The values of gross domestic
product, total labour force, investment, unemployment rate,
labour-entrepreneurship substitution rate and the new
investment value (IL-E.S) are presented in the appendix. The
negative values of the L-E.S rate, less than zero, represent
the rate at which technology must grow to complement the
shortfall in labour input (i.e. the rate at which effective
labour must grow to maintain the growth in output), while
the positive rates, greater than zero, represent the L-E.Sr (i.e.
the rate at which labour must substitute for entrepreneurship).
Data were sourced from various institutions. The gross
domestic product, investment (which is the sum total of all
credit to private sector and credit to all tiers of government)
was sourced from the Central Bank of Nigeria (CBN)
statistical bulletin, total labour force was sourced from
United Nations Conference on Trade and Development
(UNCTAD), and unemployment rate in Nigeria was sources
from the International Labour Organization (ILO). The
values of GDP growth rate and growth rate of total labour
force were calculated using the growth rate formula.
(Y2 – Y1)/ Y1 (3.1)
We hypothesize that boosted investment is not significantly
influenced by labour-entrepreneurship substitution rate and
previous year boosted investment.
The basic model which tested the impact of labour-
entrepreneurship substitution rate on the new investment (IL-
E.S) follows;
LNILES = b0 + b1*LESR + b2*LNILES(-1) + b3*RESID(-1)
+ e (3.2)
Where,
LNILES = Log of new investment boosted by LESR
LESR = Substitution rate
LNILES(-1) = lagged value of the dependent variable
[AR(-1)]
RESID(-1) = lagged value of the residual (error
correction term)
e = the residual of error term
b0 = constant
b1, b2, b3 = parameter estimates (variable coefficients)
IV. DISCUSSION
The ADF unit root test showed that the Nigerian gross
domestic product at 2010 constant basic prices, as reported
by the Central Bank of Nigeria in her 2014 Statistical bulletin
was stationary at the second order of integration. Labour-
Entrepreneurship substitution rate was stationary at the first
order of integration. The new investment (ILES) was
stationary at order of integration (1), while log of new
investment (LNILES) was stationary at integration order (1)
(see appendix 5). A cointegration test of the Johansen
method confirmed that the variables were cointegrated (see
appendix 6).
The result of the error correction model (see appendix 1)
showed that the labour-entrepreneurship substitution rate
(LESR) and the auto regressive function of the new
investment (LNILESt-1) significantly determined the current
new investment (LNILES). Furthermore, the variables had
positive impact on the dependent variable. It is therefore
evident that previous year’s value of the new investment
significantly influences current year’s investment. Both
variables individually and jointly influenced current value of
the new investment. The result further implies that the
substitution rate significantly creates sufficient investment
that absolves the unemployed labour and grows the economy
optimally. However, the adjustment in the residual to
equilibrium was not significant in 28 years, given the 55%
speed of adjustment and due to the autoregressive function.
Serial correlation was not noticed in the result and the
residual had a constant variance (see appendix 2 & 3).
Therefore, the result can be relied for policy forecast.
The extent of determination of the new investment (ILES) on
Nigeria’s economic growth was measured using the t-
statistics and correlation. It was discovered, using
Bonferroni’s multiple comparison adjusted probabilities of
covariance analysis that the new investments significantly
determined output (GDP) in Nigeria. The correlation showed
that the new investment has 95.98% positive relationship
with the gross domestic product in Nigeria and a coefficient
of determination of 92.13%, holding other determinants
constant (see appendix 4).
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Following the findings of the study, we reject the null
hypothesis and conclude that new (boosted) investment is
significantly influenced by both the labour-entrepreneurship
substitution rate and previous year boosted investment.
V. CONCLUSION
This study tries to answer certain questions of output,
employment and wage determination is a mixed economy
such as Nigeria. Although idealistic, its assumptions are
attainable and can be adopted to solve the problem of low
output and employment. The central theme of the theory is
the Labour-Entrepreneurship substitution mechanism.
Specifically, the theory developed the capital accumulation
model, short-run growth model, and wage and
unemployment adjustment mechanisms. The theory utilized
some form of gratuity payment as part of the capital
accumulation model. The study is crucial in boosting output
and employment in developing and developed nations as well
as aid developing countries such as Nigeria to recover from
recession and boom again. There is need for policy
adjustments in order to implement the mechanism.
Given the findings, the study recommends that developing
and developed countries build the labour-entrepreneurship
substitution mechanism in their growth model as this will
increase output as well as create employment that sufficiently
absolve the unemployed in the country.
REFERENCES
[1] BGL Research and Intelligence (2011), Economic Note:
The Nigeria’s Paradox of Growth amidst High Poverty
Incidence. Retrieved from: www.bglgroupng.com on 5th
September, 2016.
[2] Federal Ministry of Employment, Labour and
Productivity (2003), National Employment Policy.
Retrieved from: www.google.com/national_-
employment_policy.pdf on 5th
September, 2016.
[3] World Bank (2013), “Nigeria Economic Report”, The
World Bank, No. 1, May, 2013, 77684.