THE EFFECTS OF TECHNICAL PROGRESS AND SALES TURNOVER ON EMPLOYMENT OF LABOUR IN KANO AND KADUNA TEXTILE FIRMS
THE EFFECTS OF TECHNICAL PROGRESS AND SALES TURNOVER ON EMPLOYMENT OF LABOUR IN KANO AND KADUNA TEXTILE FIRMS
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Date
1999-03
Authors
Sam., Badayi M.
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Abstract
There are two divergent views about the effect of technical progress on employment.
One view states that technical progress is associated with an increase in the
employment of labour owing to the introduction of new products and increased
productivity, which help to create new demand for labour and material resources.
The other view argues that technical progress displaces workers owing to automation
and robotization of jobs/tasks formerly handled by several workers. Cross-sectional
and time series data from Nigerian textile industry provide opportunity to evaluate
these viewpoints. Employing regression model and OLS technique of estimation, the
study establishes on the basis of economic, a priori, statistical and second order tests
criteria that technical progress in the Nigerian textile industry appears to be
associated with a decrease in the employment of labour. Specifically, it is found to
have a negative effect on the employment of unskilled labour and a positive effect on
the employment of skilled labour. The results also confirm that the negative
employment effect outweighs the positive employment effect when the effects are
considered simultaneously. The sales turnover variable was also found to be
positively associated with the employment of labour. The values of R2 in the three
equations of the model were reasonably high indicating goodness of fit. Most of the
parameter estimates were also found to be statistically significant. Equally, when the
second order econometric tests such as Park (1966) heteroscedastic test and Ramsy
(1969) model specification error test were conducted in order to test for the violations
of the desirable properties of the technique of estimation used, the results of the
various tests do not appear to invalidate the initial findings of the study. On the basis
of the overall results, one major recommendation is that solutions to Nigeria's
unemployment problems should not be found in massive control of techniques used
by firms and technological progress in Nigeria textile industry, in the interest of
higher productivity, long run growth and competitiveness in the world market.
Instead a package or an economy wide approach should be adopted. This involves
the rapid and massive promotion of small and medium scale enterprises that can
integrate both forwardly and backwardly with bigger industries in conjunction with
carefully designed tax and subsidy policies as well as the promotion of industrial
research activities that can modify on gradual basis or find local substitute to our
industrial raw materials, machinery and equipment. Future research in the area of
this study should focus attention on a more rigorous econometric approach through
richer data sets and disaggregated modeling to provide a more solid footing tor the
results of this study.
Description
Thesis submitted to the Department of Economics, Ahmadu
Bello University, Zaria in Partial Fulfillment for the Award of
the Degree of Doctor of Philosophy in Economics.
March, 1999.
Keywords
EFFECTS OF TECHNICAL PROGRESS,, SALES TURNOVER,, EMPLOYMENT OF LABOUR,, KANO AND KADUNA TEXTILE FIRMS