ADSU International Journal of Applied Economics, Finance and Management

Relationship Among Economic Growth, Employment Generation And Income Distribution In Nigeria

Abstract

This study examines the relationship among economic growth, employment generation, and income distribution in Nigeria from 1990 2020. Using time series data and employing Vector Autoregression (VAR) methodology, the research analyzes how economic growth translates into employment opportunities and affects income distribution patterns across different sectors and regions. The study reveals that while Nigeria has experienced periods of significant economic growth, particularly during oil boom periods, growth has not consistently translated into proportional employment generation or equitable income distribution. The findings indicate a weak correlation between GDP growth and employment creation, with a correlation coefficient of 0.34, suggesting that Nigeria’s growth pattern has been largely jobless. Income distribution analysis using Gini coefficient shows persistent inequality, with values ranging from 0.48-0.52 over the study period. The agricultural sector demonstrates the strongest employment-income linkage, while the oil sector shows high growth contribution but minimal employment impact. The study recommends diversification of the economy, investment in labor intensive sectors, implementation of progressive tax policies, strengthening of social protection programs to ensure that economic growth translates into meaningful employment and improved income distribution. These findings contribute to knowledge the growth employment-income nexus in resource-dependent economies and provide policy insights for achieving inclusive economic development in Nigeria.