INCOME SHOCKS AND CONSUMPTION PATTERNS AMONG OSUN STATE WORKFORCE IN THE FACE OF ECONOMIC DOWNTURN

In Nigeria, impact of economic downturn has been visible not only on impact to macro-economy, but, importantly on allocation of resources to various states of federation and consequently on regular payment of salaries to workforce. The extent to which economic downturn has influenced income shocks and consumption pattern has not been so much studied in the literature. Hence, the objective of this paper is to analyze income shocks and consumption pattern in the face of economic downturn particularly among Osun State workforce. Primary survey was conducted; in which questionnaire was administered to about 1200 respondents which were randomly selected from 12 local governments (LGAs) in Osun State. The 12 LGAs were chosen using stratified random sampling from 30 LGAs which were selected based on the 3 Senatorial zones in Osun State. It was found that there is significant relationship between income shocks as a result of economic downturn and the consumption pattern of Osun State workforce. The study found that a unit increase in fluctuation in monthly salary results to a -0.026 decrease in consumption pattern which indicated a negative relationship between fluctuation in monthly salaries and consumption and t-value = -0.305. The result of the analysis is statistically significant to employee performance at 5% confidence level. Hence, the null hypothesis is rejected and the study concludes that fluctuation in monthly salary of workers has a negative relationship with consumption pattern, necessitating better coping strategies. The paper recommended that the workforce should be encouraged to get themselves involve with other income generating activities to cushion the effects of income shocks.