Minimum Wage and Unemployment in Developing Countries: A Case of Nigeria

Abstract

This study investigates the validity of the claim that high wage rates exacerbate unemployment, given that unemployment rates are still high in many developing countries despite existing usually low minimum wage rates. To this end, the short-run effect of minimum wage on unemployment in Nigeria was evaluated by employing the Autoregressive Distributed Lag (ARDL) model to analyze the secondary data used for the study over the period 2000-2022. Findings of the study indicate that minimum wage, domestic investment, government expenditure, and inflation all positively affect unemployment levels in Nigeria. Conver