Effect of Part-Time Employment and Skills Mismatch on Labor Productivity, Unemployment and Output Gap in Nigeria
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Skilled manpower development and its effective utilization in the production process is necessary for high economic growth and poverty reduction. This has been the goal of Nigeria which has not been achieved yet despite the establishment of the Industrial Training Fund and the National Directorate of Employment. The nation in 2015 had about 10.5 million children who were out of school, tertiary participation and completion rate of 15 and 13 percent respectively. The mean years of schooling was 5.4 and about 1 in 5 workers was a part-time employee. Labor productivity rate in the country was 57 percent less than the seven fastest developing countries and declined by 5.78 percent between 2015 and 2018 while the unemployment rate was 23 percent in 2018. Economic growth rate was 3.15 as against 6.22 percent policy target for the period 2011 to 2018. These have contributed to criminal activities such as drug abuse, kidnapping, insurgency in the North East, crude oil theft and other socio-economic vices. The purpose of this study is to examine the effect of part-time employment on labor productivity and also determine the effect of skills mismatch on unemployment and output gap in Nigeria for the period 2010 to 2018 using panel and time-series data. Random effects model was used to examine how part-time workers affect labor productivity while the ARDL model was used to determine the effect of skills mismatch on unemployment and output gap. An average increase in part-time workers by 1 percent contributed to labor productivity increase by an average of 0.47 percent while an average increase in capital importation and the number of workers by 1 percent reduced labor productivity by an average of 0.02 and 0.94 percent respectively. It was also found that an average increase of 1 percent in skills mismatch and the number of youths contributed to an increase in unemployment by 13.61 and 2.32 percent respectively but real GDP contributes to unemployment decline by 0.07percent when it increases by an average of 1 percent. The nation’s output gap was found to increase by an average of 0.59 percent with an average increase in skills mismatch by 1 percent but reduced by 0.07 and 0.04 percent due to an average increase of 1 percent in capital formation and oil prices. The country should set up a department in the federal ministry of labor and employment that will ensure regular training of part-time workers and improve on their wages. There should also be a committee of the federal government, private sector and institutions of learning at the federal, state and local governments that will review educational curriculum at regular intervals to make skills acquisition in the country relevant to industry demand at the domestic and international level.