EFFECTS OF TRADE UNION ON ECONOMIC GROWTH AND WELFARE OF THE MEMBERS IN NIGERIA: A TEST FOR COINTEGRATION

Abstract

The objective of this study is to investigate the effect of trade union membership on members= welfare and economic growth in Nigeria. In order to achieve the first part of this objective, a cross-sectional secondary data set on the characteristics of main occupation of individuals, collected during the Nigeria Household Living Standard Survey 2003/2004 conducted by National Bureau of Statistics (2004) in collaboration with European Union, World Bank and Department for International Development has been accessed and used. Descriptive method, Two-Sample t-test, Fisher=s Exact test, Ordinary Least Squares (OLS) estimator and Logistic Model as well as robust regressions have been applied to accomplish the first part of the objective. For the second part of the objective, time series data set covering the period, 1970-2004 has been sourced from the Central Bank of Nigeria=s Statistical Bulletin 2006 and Alan Heston, Robert Summers and Bettina Aten, Penn World Table Version 6.2, September 2006. Cointegration regression and error correction mechanisms have been applied to test for both the short and long run effects of trade union disputes on economic growth in Nigeria. The findings of this study indicate a significant positive relationship between trade union membership and workers pay and welfare. Therefore, the direct way to achieve improvement in income and welfare of the workers is to encourage them to organize themselves and bargain collectively so as to achieve the millennium development goal of reducing poverty by the year 2015. Similarly, trade unions disputes are found to have both short run and long run negative impacts on economic growth. In view of this, policies that will resolve the disputes before the unions embark upon industrial action should be given prominence.