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Citation Information

Type Journal Article - Journal of Economics and Sustainable Development
Title The relationship between unemployment, inflation and crime: An application of cointegration and causality analysis in Nigeria
Author(s)
Volume 5
Issue 4
Publication (Day/Month/Year) 2014
Page numbers 131-137
URL http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.1013.5982&rep=rep1&type=pdf
Abstract
The study investigates the relationship between unemployment, inflation and crime in Nigeria. The study
examines the causal relationship between unemployment, inflation and crime in Nigeria for the period 1980-
2011. The stationarity properties of the data and the order of integration of the data were tested using the
Augmented Dickey-Fuller (ADF) test. The variables tested stationary at first differences. The Johansen approach
of cointegration was applied to test for the long-run relationship among the variables. The result indicated three
(3) cointegrating relations between the variables; the Granger-causality suggests that there is unidirectional
causality running from unemployment and inflation to crime in Nigeria. The study concludes that unemployment
in Nigeria Granger causes crime. The reason is that unemployment rate in Nigeria is a complementary indicator
of income opportunities in the legal labour market. Therefore, when, unemployment rate increases the
opportunities for earning income decreases which instigate the individuals to commit crime. The costs of
committing crime go down for unemployed workers. The results of causality support this proposition that
unemployment causes crime. The study recommends that holistic effort should be made by governments at all
levels to create jobs and arrest unemployment. Nigerian government instead of employing foreigners should
sponsor her citizens abroad for studies in diverse fields of study.

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