Financial innovation and unemployment: does digital finance reduce joblessness in Nigeria?

Authors

DOI:

https://doi.org/10.26565/2310-9513-2026-23-02

Keywords:

Financial Innovation, Unemployment, Inflation, Nigeria, ARDL

Abstract

This paper examines the relationship between financial innovation and unemployment in Nigeria from 1993 to 2023, utilizing data from the Central Bank of Nigeria and World Development Indicators. It employs an Autoregressive Distributed Lag (ARDL) model to analyze both short- and long-term effects. The results indicate that increased internet usage is associated with reduced unemployment in the short term, facilitating job searches and online entrepreneurship. Short-term usage of mobile money transactions correlates positively with unemployment due to initial adjustments during the digital payment adoption phase. Conversely, in the long term, mobile money negatively impacts unemployment as persistent lagged effects contribute to job creation and financial inclusion. GDP growth is found to decrease unemployment rates in both timeframes, affirming its role as a crucial driver of job opportunities. Inflation shows limited effects on unemployment, with a slight positive short-term relationship indicating temporary employment challenges amid rising prices. The study highlights the importance of financial innovation and macroeconomic stability in reducing unemployment and recommends strategies such as improving internet access, enhancing digital literacy, promoting mobile money usage, supporting economic growth, and implementing policies aimed at financial inclusion.

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Published

2026-05-30

Issue

No. 23 (2026): The Journal of V. N. Karazin Kharkiv National University Series «International Relations. Economics. Country Studies. Tourism»

Section

The world economy and international economic relations

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How to Cite

Financial innovation and unemployment: does digital finance reduce joblessness in Nigeria? (2026). The Journal of V. N. Karazin Kharkiv National University. Series: International Relations. Economics. Country Studies. Tourism, 23, 17-26. https://doi.org/10.26565/2310-9513-2026-23-02