impact of population growth on unemployment in nigeria

impact of population growth on unemployment in Nigeria

ABSTRACT

This study is designed to investigate on the impact of unemployment on the Economic growth in Nigeria for the period of 26 years (1981-2008). This is done in other to find out its influence on the persisted occurrence of unemployment among the Nigeria youths and stagnates the growth of the economy. It focuses on those objectives.
1) To determine the relationship between unemployment and economic growth in Nigeria.
2) To ascertain the magnitude of this relationship the study also tested for two hypothesis.
The data for the study was obtained from the Central Bank of Nigeria statistical bulletin on gross domestic product (GDP). The major findings were that unemployment contributes negatively to the Gross Domestic product (GDP) while government expenditure contributed positively to Gross Domestic product some recommendations were made based on the finding.

CHAPTER ONE

INTRODUCTION

• Background of the study

Over the years there had been several discourse about the nexus between population growth and unemployment rate in developing, underdeveloped and developed economies ever since the onset of the classical economists. Economists, policy makers and government agencies have debated whether or not population growth which may emanate from technical progress can enhance unemployment? However, most economists are of the view that long run technical progress and growth as resulted to a rising standard of living in advanced economies. While others are of the view that technical progress and population growth have contributed to unemployment which has been much more controversial especially in the developing countries which Nigeria is inclusive. The aforementioned controversy had found its root from the empirical study of Okuns (1962) which buttressed on the nexus of population and employment. His study revealed that if there is an association between employments and output then, there is the tendency that such relationship may change over time due to changing growth rate of population. Hence, this gives room to examine the level of change way of considering the time frame of the change that takes place between population and employment from either the short run or long run perspective as observed by Tobin (1993), Kalder (1985) and Solow (1997). Furthermore, in the recent times the evaluation of Real Business Cycle (RBC) models has thrown more light in terms of significance of the link between population and employment. This is relevant because the RBC stipulates that technology shock are the driving force of business cycles and are predicted to be positively related, thus, making the study of the effect of population growth on unemployment an important issue as opined by Khemraj (2006). Although unemployment rate in any country is a function of population growth, demographic shifts, varying labour market participation and so on. However one might want to erroneously presume that the demand side of labour, employment offered by firms among others is the most driving force of unemployment rate. That is why this current study would not do any bad by following up on this line of thinking. Hence this current study focuses on the link between unemployment and population growth via time – frame using error correction modeling approach in order to buttress the study of Laudmann (2004) which stipulated that the nature of the mechanism that links unemployment and growth should be taking into account. Sequel to this, it is important to also take account of the usefulness of these changes in population growth because their effect on population growth may be contradictory with respect to their time frame which among others includes; short, medium and long run as a function of the accompanying effects of changes in population growth as can be depicted in the case of the sequences of job creation as observed by Laudmann (2004) and Walsh (2004). The aforementioned can be deduced from a typical operation of a labour market who is naturally vested with such responsible to create for firms and workers through its unions as a result of interaction at different time horizons, thereby ensuring that both the time horizon of economic decisions couple with the strength and direction of relationship among labour market variable vis-à-vis wages prices and unemployment among others are likely to change across time scales as opined by Gallegati et al (2009, 2011) thereby buttressing that the long run effect of the ascribed technological decision which is informed by technical innovation may be different from short run effects. This is because in the short run, new technology is likely to reduce labour thereby adding to the problem of unemployment as was visible in Europe since the 1990. On the other hand, it could be pinpointed that the advent of new technology in the long run, which in turn replaces labour increases population thereby making firms and the economy at large to be more competitive. However, there is the likelihood that the foregoing may reduce unemployment and thus increase employment. The above mentioned relationships especially that of the medium and long run relationship between population growth and unemployment have been generally analyzed in the empirical literatures by means of examining aggregate data especially with the use of time series data with respect to the rate of growth of labourpopulation was very volatile whose implications in terms of the movement of the other supply-side variables are difficult to interpret particularly in the short-run. Hence, the focal point of this current research is to examine the nexus between unemployment and population in the short and long run respectively. Hence, the objective of this paper is to re-examine and provide evidence on the nature of relationship between labourproductivity on a scale-by-scale basis for the Nigeria economy because this may assist to isolate some key relationships over different time scales thereby providing some information about the challenging theoretical frameworks and also the conduct of monetary policy in an economy. The current paper proceeds as follows, section 2 of the paper presents and briefly reviews relevant literatures and theories which have provided possible causal links between population and unemployment the next section presents the research methodology that is to be adopted by the study, while section 4 provides discussion and interpretation of empirical result. Section 5 summarizes the main results and presents the conclusions.

• Statement of the problem

The factors responsible for the increase in the level of unemployment in Nigeria includes: rural urban migration, wrong government policies, urban bias, lack of population control, lack of mental skill and practicability, corruption and Inspirited Entrepreneur drive.

1.3   Significance of the study

This study deals with the population and the problem of unemployment in Nigeria. The economy of the Nigeriais characterized by high population growth. They are facing great challenge in generating adequate job opportunities for their teeming population. Nigeria population is ever increases with limited number of job opportunities. Reviewing the socio-economic organization, monitoring rural-urban migration, promoting agriculture and entrepreneurship programmes, investment in human capital and encouraging Public Private Partnership are some of the recommendations made to avoid a “worst-case scenario” of the above problem and to realize the nation’s vision as being one of the leading economies by the year 2020

1.4   Objectives of the study

1. To check whether population growth has any impact on unemployment in Nigeria.

1.5   Research questions

1. What relationship exist between population growth and unemployment.

1.6   Research hypotheses

Ho: There is no relationship between population growth and unemployment in Nigeria.

Hi:There is a relationship between unemployment and population growth in Nigeria.

1.7   Limitations of the study

The study was limited by two major factors; financial constraint and time. Insufficient fund and time tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in theprocess of data collection (internet, questionnaire and interview).

1.8   Scope of the study

The study focuses on the impact of population growth on unemployment in Nigeria.

1.9   Definition of terms

Population:The total number of persons inhabiting a country, city, or any district or area.

Population Growth:Is the increasein the number of individuals in a population.

        Unemployment:        The number or proportion of unemployed people.

REFERENCES

Alexander, co. (1993). The changing relationship between productivity, wages and unemployment in the U.K, Oxford Bulletin of Economics and statistics, 55(1): 87- 102

Amassoma.D, NwosuP.I and Ofere A. F (2011).“The nexus of interest RTE Deregulation, Lending rate and Agricultural productivity in Nigeria”.Current Research Journal of Economic Theory.

Amassoma, D., Nwosa, P .I and R. A. Ajisafe (2011) Components of government spending and economic growth in Nigeria: An error correction modelling, Journal of Economics and Sustainable Development, Vol.2, No.4, pp. 219-237

Ball Laurence and Robert Moffitt (2001), “productivity Growth and the Philips curve”, in A. B.

Bell, Brian, Nickel, Stephen, and Quitini, Glenda, (2002).”Wage equations, wage curves and all that” labour economics, 9 pp 341 – 360.

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