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Abstract

Decent work is an important agenda of the International Labour Organisation (ILO) and the United Nations (UN). Microfinance and FDI are two variables envisaged by the ILO to contribute to creation of decent work, especially in developing countries. Against this backdrop, this study examines the effects of microfinance and FDI on decent work in Nigeria, while controlling for the effects of commercial banks’ loans and advances and inclusive growth. In doing this, macro-level annual time series data covering the 1992-2022 period are analysed using various robust least squares (RLS) estimation techniques including the M-Estimation, S-Estimation and the MM-Estimation. The empirical evidence reveals negative and significant effects of microfinance banks’ loans and advances (MFBLA) on decent work, questioning the quality of work it may have contributed to proliferating. This suggests that at macro level, it may have contributed to the creation of more vulnerable employment, thus reducing the proportion of decent work in total employment in the country. FDI, commercial banks’ lending operations and inclusive growth are found to have been significant contributors to the creation of decent work in the country. These results are buttressed by evidence from the fully modified ordinary least squares (FMOLS) estimation. Based on the evidence, it is recommended that the nation’s financial sector be strengthened, and the lending institutions should make enterprise formalization and profitability important criteria for lending. It is also recommended that the government prioritises enhancing the attractiveness of the economy to foreign investment, while pursuing inclusive economic growth.