This paper examined the relationship between unemployment and income per capita. In the estimated model for the study, gross domestic product per capita is the dependent variable, while the unemployment rate is the independent or explanatory variable. Other explanatory variables, such as capital utilization and small and medium-sized enterprises, were used as check variables. Data for the study were sourced from the Central Bank of Nigeria Statistical Bulletin and Word Bank. The Augmented Dickey-Fuller (ADF) test and Johansen Co-integration analysis were used to test for unit root and the presence of co-integrated equations respectively. The overall model was estimated using the Vector Autoregressive analysis (VAR). Findings from the study show that there is a negative and statistically significant relationship between income per capita and unemployment in Nigeria. Also, capital utilization and small and medium scale enterprises have a positive impact on income per capita, but were statistically insignificant. Based on the aforementioned findings, the following recommendations were proffered; the government should establish industrial parks to encourage local production across the country and; put more investments in the economic export free trade zone to encourage export promotion and import substitution thereby employing a significant number of skilled graduates. 

Keywords: Income Per Capita, Unemployment, Capital Utilization, Small and Medium Scale Enterprises.