Employment effects of technological innovation: Evidence from Nigeria's economic sectors

Abstract

Technological advancement continues to revolutionize the labor market and has particularly intensified the debate on its employment effect across developing and developed economies. Employing the Autoregressive Distributed Lag (ARDL) framework, this study provides insights into the employment-innovation nexus across the Nigerian economic sectors using the quarterly data from 2011Q1 to 2021Q4. The findings reveal that the employment-innovation nexus is a short-run phenomenon in Nigeria and that technological innovation enhances employment generation in the service sector and the agricultural sector, but it takes a quarter before the positive employment effect occurs. Overall, the results suggest that technological innovation improves employment and reallocates labor across the sectors, which suggests the need to fully operationalize technological innovation across the Nigerian economic sectors in order to tackle the prevailing unemployment conundrum in the country.