Sumerianz Journal of Economics and Finance, 2021, Vol. 4, No. 1, pp. 35-40 ISSN(e): 2617-6947, ISSN(p): 2617-7641 Website: https://www.sumerianz.com DOI: https://doi.org/10.47752/sjef.41.35.40 © Sumerianz Publication CC BY: Creative Commons Attribution License 4.0 Original Article Open Access *Corresponding Author 35 35 Economic Growth and Labour Market Dynamics in Nigeria: Further Evidence from ARDL Bound Testing Mukhtar Shuaibu Department of social sciences, Kebbi state polytechnic, Dakingari, Kebbi state, Nigeria Email: mukhs001@yahoo.com Shafiu Ibrahim Abdullahi PhD candidate, Department of Economics Bayero University Kano, Nigeria Muhammad Muazu Yusuf PhD, Department of Economics, Federal University Birnin Kebbi, Kebbi State, Nigeria Mustapha Yusufu Department of Economics, Federal College of Education Yola, Nigeria Article History Received: January 4, 2021 Revised: February 20, 2021 Accepted: February 23, 2021 Published: February 26, 2021 Abstract Recently the phenomenon of jobless growth has become common, defying the famous Okun law which predicted increase in job with increase in economic growth. Many factors have been advanced as explanations for this, most prominent of which are changes in the labour market and lopsidedness in economic growth. This paper is an attempt to measure labour market dynamics in Nigeria focusing on the relationship between economic growth and unemployment. The paper used data from 1991 to 2020 and employed GMM and ARDL models to analyze the data. Unlike the Okun law which prophesies negative relationship between unemployment and economic growth, the result from this analysis show that there is positive relationship between unemployment and economic growth, confirming the existence of the phenomenon of jobless growth in Nigeria. The paper recommended structural changes in the economy and the labour market. Keywords: Unemployment; Economic growth; Okun law; ARDL; GMM; Nigeria. 1. Introduction Economies around the world have been preoccupied with finding ways to deal with the problem of unemployment. Nigeria like other countries around the world is bedeviled by the devastating effects of unemployment on its citizens. The increase in unemployment in recent years has been indirectly linked to increase in suicide rate in Nigeria, as consequence of the menace (Mukhtar and Abdullahi, 2020). Thus, Nigeria is not an exception in finding out ways to create jobs and reduce high unemployment. Recently, Nigerian government has introduced programs to employ 774,000 people as way of helping people out of the suffering caused by the Covid 19 induced recession. Due to poor planning and slow economic growth, the problem of unemployment in Nigeria has become endemic. Efforts to diversify Nigerian economy have been on the Nigerian government agenda since 1980s when structural adjustment program (SAP) was introduced, but not much has been achieved. Despite the billions of Dollars in annual oil revenue, Nigerian governments have failed to use the resources effectively to develop other areas of the economy such as manufacturing, information technology and agriculture. The liberalization of Nigerian economy by Obasanjo and Jonathan governments have not achieved the desire effects, instead resulting in more unemployment, poverty and made Nigerian economy more import depended (Abdullahi, 2018). The nature of relationship that exist between output growth and unemployment has been studied on and off for decades. But, as an empirical area of study this is not a matter that is going to go. According to Mankiw (2007), conditions in labour market portray business cycle phenomenon just like in national income accounts data. Unemployment rise and fall with recession, during the period of recession it goes up and during the period of growth it comes down. The phenomenon of unemployment and the damages it cause will continue to be studied using new available data and new method of analysis. It is widely argued that in economies like Nigeria’s dominated by government or one sector (the oil sector), growth in this sector cannot decrease unemployment since majority of people are not working in the sector. Because of the nature of labour market in developing economies such as that of Nigeria unemployment tend to be classified as low despite the fact that poverty level is high. This because of the fact that most employment in poor countries such as Nigeria is in informal sector where wages are very low not enough to pull a large family out of poverty. According to An et al. (n.d) this implies very low unemployment rates in low and lower middle income countries (LLMICs) – according to the international definition- thus a low correlation between changes in unemployment and the business cycle. In Nigerian economy, earnings from crude oil have amounted to over a trillion Dollars in the past three decades. On the state of Nigerian economy, for example, Abdullahi (2018) observed