Information and Communication Technology and Unemployment: Is Technology Labor-substitutive in the Nigerian Banking Industry?

Authors

  • Alley Ibrahim Department of Economics, Fountain University, Osogbo, Osun State.
  • Adefeso Hammed Department of Local Government Studies, Obafemi Awolowo University, Ile-Ife, Osun State
  • Adebayo Lateef Department of Accounting and Finance, Fountain University, Osogbo, Osun State.
  • Oligbi Blessing Department of Economics, Western Delta University, Oghara, Delta State

Keywords:

ICT, Unemployment, Nigerian banking sector, neoclassical growth model

Abstract

The increasing demand for better banking service delivery has prodded
Nigerian Banks to deploy more information and communication technology
(ICT) in their production. While several studies have evaluated the effects of
the technological innovations on service delivery and financial performance in
the Nigerian banking industry, limited attention has been paid to the role of
ICT deployment on labour employment in the industry. This study therefore
analysed a neoclassical production function to estimate the effects of ICT on
labour employment in the industry. General Method of Moment was employed
to analyse annual data on selected banks from 2003 to 2014. Results show that
banks’ production functions in Nigeria are not perfectly factor-substitutive but
characterized by some elements of complementarity. ICT did not substitute for
labour and thus not worsen unemployment. Banks should thus be encouraged
to further embrace ICT in their production processes as this not only improves
their service delivery and financial performance but also enhances employment
generation in the country.

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Published

2023-01-17

Issue

Vol. 5 No. 2 (2015)

Section

Articles