COLLECTIVE BARGAINING AND LABOR PARTICIPATION IN NIGERIA.
Abstract
ABSTRACT
This study investigates the impact of collective bargaining and labor participation on the Nigerian economy, with employee compensation (ECOMP) serving as a key proxy. Anchored on the Bargaining Range Theory developed by A.C. Pigou, which explains the establishment of wage boundaries during collective negotiations, the research explores how labor and management set upper and lower limits for wage settlements. Employing a descriptive and analytical research design, the study utilizes time series data to assess stationarity, order of integration, and long-run relationships through the Auto-Regressive Distributed Lag (ARDL) model. The findings reveal that lagged employee compensation (ECOMP(-1)), rule of law (RL), regulatory quality (RQ), voice and accountability (VA), and political stability (PV) negatively influence current employee compensation in the short run. Conversely, control of corruption (CC), lagged government effectiveness (GE(-1)), changes in government effectiveness (D(GE)), and changes in rule of law (D(RL)) positively influence ECOMP in the long run. Notably, RQ and GE(-1) are significant predictors of long-term employee compensation, with an adjustment coefficient indicating that 74% of any short-run deviation converges back to the long-run equilibrium annually. These results highlight the critical role of institutional quality for wage bargaining in promoting labor participation in Nigeria.
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