<abstract xmlns="http://www.w3.org/1999/xhtml">

<p>The increasing rate of poverty and unemployment in Nigeria has necessitated further efforts towards alternative means of reducing the trend, outside the government’s microeconomic mechanisms. As a sector with multiplier effects on other sectors of economy through its numerous activities, the construction sector is expected to reduce both poverty and unemployment. This study, therefore, examined the relationships between construction sector variables, poverty and unemployment rates in Nigeria. Using socio-economic data published by the Central Bank of Nigeria, National Bureau of Statistics, United Nations Development Program and World Bank from 1981-2019, the study deployed an Autoregressive Distributed Lag (ARDL) approach to analyze the relationships between construction sector variables, poverty, and unemployment rates. It also used Granger causality test to determine the direction of causation between the variables under investigation. The results showed that there are both long-run and short-run dynamic relationships between poverty rate and construction sector variables (F-stat. (3.93) > upper (3.67) and lower (2.79)) bounds. It showed that no long-run balanced relationship exists between the unemployment rate and construction sector variables (F-stat. (2.01) &lt; lower (2.79) and upper (3.67)) bounds. The result further revealed that there are significant and positive linear correlations between construction sector variables, poverty, and unemployment rates; except between construction output and poverty rate, where an insignificant linear relation was established. Nevertheless, the relationships could not result to direct causal effect, except a unidirectional Granger causal relationship that flows from government capital expenditure to construction service recurrent expenditure and construction output, and from construction service recurrent expenditure to construction output. Consequently, the study suggested that construction sector expenditure and output should be directed towards poverty and unemployment reduction. This could be done through the diversification and integration of all construction sub-sectors, particularly the private sector into the nation’s economic equation. Thus, this study would direct the paths of policy makers and construction planners towards the right construction policies and plans that would lead to reduction in unemployment and poverty rates with a long-term economic transformation in Nigeria.</p>
</abstract>

The increasing rate of poverty and unemployment in Nigeria has necessitated further efforts towards alternative means of reducing the trend, outside the government’s microeconomic mechanisms. As a sector with multiplier effects on other sectors of economy through its numerous activities, the construction sector is expected to reduce both poverty and unemployment. This study, therefore, examined the relationships between construction sector variables, poverty and unemployment rates in Nigeria. Using socio-economic data published by the Central Bank of Nigeria, National Bureau of Statistics, United Nations Development Program and World Bank from 1981-2019, the study deployed an Autoregressive Distributed Lag (ARDL) approach to analyze the relationships between construction sector variables, poverty, and unemployment rates. It also used Granger causality test to determine the direction of causation between the variables under investigation. The results showed that there are both long-run and short-run dynamic relationships between poverty rate and construction sector variables (F-stat. (3.93) > upper (3.67) and lower (2.79)) bounds. It showed that no long-run balanced relationship exists between the unemployment rate and construction sector variables (F-stat. (2.01) < lower (2.79) and upper (3.67)) bounds. The result further revealed that there are significant and positive linear correlations between construction sector variables, poverty, and unemployment rates; except between construction output and poverty rate, where an insignificant linear relation was established. Nevertheless, the relationships could not result to direct causal effect, except a unidirectional Granger causal relationship that flows from government capital expenditure to construction service recurrent expenditure and construction output, and from construction service recurrent expenditure to construction output. Consequently, the study suggested that construction sector expenditure and output should be directed towards poverty and unemployment reduction. This could be done through the diversification and integration of all construction sub-sectors, particularly the private sector into the nation’s economic equation. Thus, this study would direct the paths of policy makers and construction planners towards the right construction policies and plans that would lead to reduction in unemployment and poverty rates with a long-term economic transformation in Nigeria.

The Tripartite Dynamic Relationship between Poverty, Unemployment and Construction Sector: Empirical Evidence from Nigeria

Management Dynamics in the Knowledge Economy

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

The increasing rate of poverty and unemployment in Nigeria has necessitated further efforts towards alternative means of reducing the trend, outside the...

The Tripartite Dynamic Relationship between Poverty, Unemployment and Construction Sector: Empirical Evidence from Nigeria

Published Online: Apr 13, 2021

Page range: 17 - 38

Received: Nov 21, 2020

Accepted: Jan 25, 2021

DOI: https://doi.org/10.2478/mdke-2021-0002

Keywords
construction sector, poverty, unemployment, construction output, construction expenditure

© 2021 Peter Uchenna Okoye et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

The Tripartite Dynamic Relationship between Poverty, Unemployment and Construction Sector: Empirical Evidence from Nigeria

Published Online: Apr 13, 2021

Page range: 17 - 38

Received: Nov 21, 2020

Accepted: Jan 25, 2021

DOI: https://doi.org/10.2478/mdke-2021-0002

Keywordsconstruction sector, poverty, unemployment, construction output, construction expenditure

© 2021 Peter Uchenna Okoye et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Keywords
construction sector, poverty, unemployment, construction output, construction expenditure