ABSTRACT.
The study determines the effect of Government expenditure on unemployment rate in Nigeria for the period of 33 years (1981 – 2014). The focus of the research was to determine the cause and effects of Government expenditure on health and education on unemployment rate in Nigeria. The methodology adopted for the study was ordinary least square (OLS) involving the student’s T-test, to test the significance of the individual parameter estimate, the F-test, to test the significance of the entire regression plane, the R2 and Adjusted R2, to test the joint influence of the explanatory variables on the dependent variable. Finally, Durbin-Watson’s statistics (DW) was used to check the presence or absence of serial correlation on the data. The study observed that the government expenditure on Health and education has a positive and insignificant relationship on unemployment rate. Thus, this study recommends that urgent attention should be accorded to rising unemployment and the Nigerian government should reduce unemployment rate through direct investment on Health and education sectors of the economy in order to enhance productivity skills of the labour force and formulate fiscal policy that will monitor the channelling of public funds to avoid waste of resources as observed from this research work. This would protect the economy from further negative trends of unemployment growth in Nigeria.