THRESHOLD EFFECTS OF MIGRATION ON THE TRADE POLICY–EMPLOYMENT RELATIONSHIP IN NIGERIA (1981–2024)

Authors: Adewale, M. A., Adama. I. J. & Ogbaro, E. O.

ABSTRACT

This study estimates migration thresholds associated with the relationships between trade openness, tariff rate, exchange rate and employment in Nigeria from 1981 to 2024. Using annual secondary data, it applies three two-regime threshold autoregressive specifications, one for each trade policy indicator, with net migration as an externally observed threshold variable. Each specification includes lagged employment, net migration, real GDP growth and inflation. Thresholds are selected by a trimmed grid search, with 1,000 bootstrap replications used to assess the null of a linear relationship. The estimated trade openness threshold is −69,000 net migrants but does not pass the 10 per cent bootstrap test (p = .106). Tariff rate has a threshold of −157,300 net migrants significant at the 5 per cent level (p = .031); the exchange rate model has the same estimated threshold but only weaker 10 per cent evidence (p = .070). Positive regime-specific tariff and exchange rate coefficients appear in the heavy-emigration regime, which contains only nine observations. The study concludes that migration-regime differences are most clearly supported for tariff rate, while exchange rate results are tentative and openness results exploratory. It recommends migration-sensitive assessment of trade policies without treating estimated thresholds as automatic intervention targets.

Keywords: trade policy; net migration; threshold autoregression; tariff rate; exchange rate; trade openness; employment; Nigeria.

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