THE IMPACT OF EDUCATION EXPENDITURE ON UNEMPLOYMENTIN NIGERIA (1970 - 2015

Abstract

This study analyses the impact of education expenditure on unemployment growth in Nigeria from 1970 to 2016. Using Ordinary Least Square (OLS), unit root, cointegration and Granger causality test procedures, the descriptive statistics result indicates that all the variable have positive mean values. The standard deviation result indicates that the highest standard deviation is recorded by the TDEBT while the least standard deviation is recorded by UNEMPR. The regression result of the variables shows that the coefficient of the variables, LOG (M2) and EXCH indicate positive signs.The coefficient of the variables, EDUEXP, CPI and TDEBT show negative signs. Statistically, the t-statistic result show that two variables, LOG (AGRICEXP) and LOG (TRANSEXP) are significant statistically. The F-statistics result shows that the overall estimate of the regression has a good fit and is statistically ssignificant. The R 2 - (R-squared) result indicates that the independent variables explain the dependent variable to the tune of 56%. The Durbin Watson (DW) statistics shows that the overall regression is statistically significance. The unit root test result indicate that all the variables under consideration, are stationary and integrated of order one at 5% level of significance. The trace likelihood ratio and maximum eigenvalue results of the cointegration test indicate four and two cointegrating equations respectively at 5% significant level. The multicolinearity test result shows that there is no multicolinearity among the variables under consideration. The Granger Causality test result shows that there is no direction of causality between EDUEXP and UNEMPR, M2 and UNEMPR. A unidirectional causality existing from CPI to UNEMPR. A uni-directional causality exists from TDEBT to UNEMPR. The result also shows a uni-directional causality from EXCH and UNEMPR. The study therefore recommend that there is need for the government to increase their funding in the educational sector.