📄 Abstract
This study investigates the relationship between inflation and unemployment in Nigeria using annual data from 19912025 obtained from the World Bank. The study employs a Vector Error Correction Model (VECM) with inflation, measured by consumer prices (annual %), specified as the dependent variable and unemployment rate (% of total labor force, ILO estimate) as the independent variable. The findings reveal a statistically significant long-run relationship between inflation and unemployment, with the coefficient of unemployment (18.88363; t = 2.152) indicating that increases in unemployment significantly raise inflationary pressures in the long run. The error correction coefficient is negative and statistically significant (-0.894745; t = -3.375), indicating rapid adjustment toward long-run equilibrium. The adjusted R-squared value of 0.401 indicates that approximately 40.1% of variations in inflation are explained by the model. The study concludes that unemployment remains an important determinant of inflationary behavior in Nigeria and recommends coordinated macroeconomic policies aimed at reducing unemployment while maintaining price stability to foster sustainable economic growth.
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📚 How to Cite:
Gumisiriza Lawrence, Nahabwe Patrick Kagambo John, Kagarura Willy Rwamparagi, Agaba David , INFLATION AND UNEMPLOYMENT IN NIGERIA: AN EMPIRICAL INVESTIGATION , Volume 13 , Issue 5, May 2026, EPRA International Journal of Environmental Economics, Commerce and Educational Management(ECEM) , DOI: https://doi.org/10.36713/epra27805