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Abstract
The study investigated the relationship between the unemployment rate and crude oil price movements in Nigeria using a quarterly time series data for the periods 2014q1 to 2018q4. The study adopted the Johansen co-integration and Vector Error Correction Model analysis. Estimates show that in the long-run, the crude oil price is statistically significant with a negative causal relationship with the unemployment rate at -1.0934. So as oil price rises, unemployment reduces in the country. Crude oil price is, however, statistically insignificant in the short-run. The error correction term is as expected with a negative coefficient of -0.402224 and statistically significant considering its P-value of 0.0357. This implies that the previous quarter's deviation from the long-run equilibrium is adjusted in the current quarter at a speed of 40.22%. The inverse relationship between the unemployment rate and crude oil price as portrayed by the study is not surprising because the economy thrives on proceeds from oil rent. The study recommends diversifying the economy to reduce over-reliance on oil, revitalising the manufacturing sector to increase industrialization, implementing long-term plans to curb unemployment rate, and making the lending interest rate less burdensome. Keywords: Crude oil price; Unemployment rate; Flow supply shocks; Flow demand shocks; VECM; Johansen cointegration.