THE DETERMINANTS AND DEVELOPMENT IMPLICATION OF UNEMPLOYMENT IN NIGERIA

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND TO THE STUDY

One of the greatest challenges facing the Nigerian economy is unemployment which has maintained a rising trend over the years. The total labour force in Nigeria is made up of all persons aged 15-64 years excluding students, home keepers, retired persons and stay-athome to work or not interested persons. In Nigeria, unemployment is regarded as one of the most challenging economics problem facing the federal government. Although, there are variations in the measurement of unemployment, official estimates show their results as follows: from 1985-2003, the data shows a highly fluctuating trend from both the urban and rural sectors of the economy. From the data, the 1985 figure shows the percentage of the national urban and rural unemployment as follows: national 6.10%, urban 9.8%m rural 5.2%and in year figure it is as follows: national 3% urban 3.8% rural 2.7 %( CBN, 2004). The rising rate of the population of the country which is faster than the job opportunities available, a situation in which birth rate is rising, death rate falling and the population growth rate is between 2.5% and 3%, unemployment is bound to exist. There had also been a total neglect of the agricultural sectors and consequent mass exodus of able bodied youths from the rural to urban areas in search of the none existing white cooler jobs. This further reduces employment in agriculture and puts pressure on existing urban jobs (Anyanwu 1995). The socio-economic effect of unemployment includes: fall in national output, increase in rural-urban migration, waste of human resources, high rate of dependency ratio, poverty, depression, frustration, all sorts of immoral acts and criminal behaviour e.g prostitution, armed robbery etc. The social effect of unemployment brings to light the need to proffer possible solution to salvage our nation Nigeria (Jelilov, Gylych; Kachallah Ibrahim, Fatima; Onder, Evren, 2016).

Every economy strives to achieve three macroeconomic goals - price stabilization, full employment, and high rate of output growth. These economic aggregates are interconnected, so that a change in one of them will lead to a change in others. For example, during recession output falls, unemployment rises and prices fall. As a result, discrete use of policy tools is important so as to avoid unintended outcomes. Unemployment is a major macroeconomic problem facing most developing countries. It is a situation in which people willing and capable of working are unable to find suitable jobs to earn a living. Nigeria as a country has a long history of high unemployment. This has affected the country negatively in many ways. It has led to continuous fall in the growth rate of output and income, leading to low standard of living. According to Alanana (2003), unemployment is potentially dangerous as it sends disturbing signal to all segments of the Nigerian society. Presently Nigeria is in a recession and has unemployment rate of 33%. This is very disturbing because there are thousands of university graduates who have nothing doing to survive. This has increased the rate of robbery, drug trafficking and kidnapping in the country. It has also increased the migration of human capital to developed countries, thereby worsening the development problem facing the country. Having established that unemployment is an evil in Nigeria which must be taken care of for growth to take place, it is important to look at the determinants of unemployment in Nigeria. It is when the factors affecting unemployment have been identified, that a move can be made towards using the necessary policy tools to influence those factors in the right direction, so as to reduce unemployment. Thus, the aim of this paper is to identify the determinants of unemployment in Nigeria.

According to Walterskirchen (1999) the simple, but wrong argument is: There can be no negative relationship between economic growth and unemployment, because GDP and unemployment are both rising in the long run. It is evident that employment will only increase if GDP is rising faster than productivity. Other things being equal, the greater the amount of goods and services produced, the greater the labour required for production; because economic growth and employment go hand in hand. But there is also the notion that higher productivity could mean fewer jobs. According to Calmfors and Holmlund (2000) there is often a failure to distinguish between increases in output that are due to higher capacity utilization and those that are due to long-term growth. Labour-market reforms that lower wage costs and thus increase employment will, of course, also cause output to grow during the adjustment process (Jelilov, Gylych; Onder, Evren, b 2016). In the short run, the relationship between economic growth and the unemployment rate may be a loose one. It‟s not unusual for the unemployment rate to show sustained decline sometime after other broad measures of economic activity have turned positive. Hence, it is commonly referred to as a lagging economic indicator. Thus, the key to the long-run relationship between changes in the rates of GDP growth and unemployment is the rate of growth in potential output as an unobservable measure of the capacity of the economy to produce goods and services, when available resources, such as labour and capital, are fully utilized (Jelilov, Gylych; Chidigo, Mary; Onder, Evren, 2016).

TOPIC: THE DETERMINANTS AND DEVELOPMENT IMPLICATION OF UNEMPLOYMENT IN NIGERIA

Format: MS Word

Chapters: 1 - 5, Abstract, References
Delivery: Email

Number of Pages: 50

Price: 3000 NGN

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