Dynamics of Savings and Minimum Wage in Nigeria

Ayodeji Seun Asubiojo; Moses Clinton Ekperiware

doi:7090340

The study examined and appraised effects of minimum wage on savings in Nigeria. These were with a view to determining the long-run relationship minimum wage and savings in respect to minimum wage legislations in Nigeria, 1980 to 2016. Secondary data were used for the study. Annual data on minimum wage, savings, per capita income, interest rate and inflation were sourced from Central Bank of Nigeria Statistical Bulletin, 2016 edition. An econometrics technique of Autoregressive Distributed Lag (ARDL) was adopted for this study. The result showed that wage legislation has appositive and significant effect on savings in the long-run (t= 2.997987, p<0.0071). This was supported by bound test result indicating that there is long-run relationship between the dependent variable and independent variables. The study concluded that minimum wage legislation has a significant positive effect on both savings in the long-run.

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