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EFFECT OF POPULATION GROWTH ON UNEMPLOYMENT NIGERIA (1980-2016)

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Abstract

This research investigates the effect of population growth on unemployment in Nigeria between 1980-2016 through the application of Ordinary Least Square (OLS) technique Augmented Dickey-Fuller test was employed to test the presence of unit root in the series; The relationship between unemployment on one hand and population growth, mortality rate and poverty among other variables was explored. The results reveal that an increase in population growth and poverty brings about an increase in unemployment while a decrease in mortality rate also result in an increase in unemployment. The study also revealed that the independent variables account for about 98% of the variation in the dependent variable. The hypotheses further show that population growth, mortality rate and poverty are statistically insignificant at a significance level of 0.05.From the correlation analysis it can concluded that there is serial correlation amongst the residuals of the regression estimates from 1980 to 2016 i

CHAPTER ONE

INTRODUCTION

1.1 Background to theStudy

Nigerian environment and its natural resources are fast being degraded and consumed with drastic human population increase. Nigeria is a country with the largest human population in Africa estimated to be about 150 million (Department of Petroleum Resources DPR Nigeria 2005) and popularly regarded as The Giant of Africa for its population. Geographical area of Nigeria, is 923,768 sq km and it is densely populated and the economists are yet to arrive at this geometrical growth influences positively or negatively the level of employment, underemployment and unemployment in this country.

According to Okuns (1992), if there is an association between employment and output then, there is the tendency that such relationship may change over time due to changing growth rate of population. Most Economists have argued that long run technical progress and growth results to a rising standard of living in advanced economies thereby creating more opportunities, resulting to less unemployment, others argue that this has contributed in increased level of unemployment, as few others are still biased about the issue. Khemraj (2006) opined that population growth has effect on employment, backing up the significant effect as presented by Real Business Cycle(RBC) about how technological shock has become a driving force of business cycles as predicted.

Although food production in different world regions has generally increased at similar rates, there has been much more variability in the rate of population growth from place to place.  In countries where population is growing rapidly, there is some concern that this growth threatens the local availability of resources. Some Economists believe the world’s poor are the victims of a global economy that distributes power and resources unequally, resulting in unemployment statues. Nigeria rapid population growth rate has caused concern for the environment, but so, too, did the demands of energy hungry organizations.

The Nigerian’s labor market as supported by the Federal and State governments got off to a solid start in 2016 with different Job programs to reduce unemployment, on the heels of robust growth in 2015. However, even as employment rises and the unemployment rate falls, not all participants in the economy are benefiting at the same degree thus high levels of unemployment still persists, coupled with the recent national recession and inflation. At the moment, Nigeria’s growth rate is projected at 2.56% (Department of Petroleum Resources DPR Nigeria, 2005) annually. With this high growth rate and applying the double time growth analysis, Nigeria’s population will be expected to have added 3,072,000 persons for the first year of the estimate and almost 3,150,643 the second year based on double time population growth rate analysis. According to Department of Petroleum Resources DPR, Nigeria (2005), Nigeria’s total primary energy consumption has more than doubled since 1980,owing to its continuing population boom and the further development of the country’s economy (fueled by oil development). That is to say that an increase in human population means an increased demand on the environment to provide those resources needed to sustain it, thereby needing more workforces. However, a question may arise from declining economy like, is it all the workforces needed that are allowed to engage and establish?

Hence this study focuses on the effect of population growth and unemployment in Nigeria.Laudmann and Welsh(2004) state that the nature of mechanism that linkunemployment and growth should be taken into consideration with regard to short-medium- and- long run as a function of accompanying effect of changes in population growth as can be depicted in the case of the sequences of job creation. Gallegatiet al (2009,2011) opined that the relationship among labour market, variable wages and prices and unemployment among others are likely to change across time scales. This is because  in the short run, new technology is likely to reduce labour thereby adding to the problem of unemployment as was seen in Europe since 1990.In other way, it could be that innovation and advent of new technology in the long run which in turn replace labour  increases population thereby making firms and the  economy more competitive.

Hence, the focal point of this research is to examine the nexus between the dynamic population growth and level of unemployment in Nigeria in short and long run; This will provide more information about the challenging theoretical frameworks and also the conduct of monetary policy in the economy. The subsequent chapters will review the relevant literature and theories which have provided possible links between population growth and unemployment; followed by the methodology, discussion and interpretation of empirical results. While the last chapter summarizes the main results and present the conclusion.

1.2 Statement of Problems

One of the major microeconomic goals and dreams of any sustainable economy is the attainment of full employment level. But despite the efforts of the government, private and individual entrepreneurs, unemployment has remained a major challenging issue in Nigeria. Unemployment is of a very large proportion in Nigeria young youths in majority. According to the National Bureau of statistics, the population of Nigeria from 2010 to 2017   has increased from 159,424, 742 million to 191,835,936 million; with unemployment rate rising from 17.5% in January 2017, the youths either unemployed or underemployed from 15 – 24 years rated 54.3 %, making situation more frustrating and poverty growing at alarming rate.   Nigeria has been experiencing population explosion for the past 50years due to high fertility rates, quadrupling its population overtime. The Nigeria Population Commission (NPC) recently announced that our population stand at now a staggering 167, 912, 561 and is projected to hit 221, 392, 163 by July 1, 2020, but much attention was not paid to this notice. Regional Head of Research, Africa Global Research, Standard Chartered Bank, Razia Khan, note  “Nigeria’s big concern of course is whether sufficient employment opportunity can be generated to absorb the country’s growing pool of labour, and whether this can take place rapidly enough”. Employment crisis, manifested in various forms of underemployment rather than open unemployment, have been the core problem plaguing Nigeria as one of the developing country. This is of serious concern to the citizens, economists, government and other analysts in the economy. These problems prompted the researcher to embark on this study.

1.3 Research Questions

Does population growth affect unemployment in Nigeria?

How does mortality rate affect unemployment in Nigeria?

How does poverty affect unemployment in Nigeria?

1.4       Objectives of the Study

The main objective is to determine the effect of population growth on unemployment in Nigeria. This research is aimed to achieve the under listed. Specifically the study will:

Determine if the population growths affect unemployment in Nigeria.

Ascertain the effect of mortality rate on unemployment in Nigeria

Determine the effect of poverty on unemployment in Nigeria

1.5       Research Hypotheses

In the view of the following study with respect to the effect of population growth on unemployment in Nigeria, the following hypotheses would be tested.

H

01

: there is no significant effect of population growth on unemployment in Nigeria.

H

02

: there is no significant effect of mortality rate on unemployment in Nigeria

H

03

: there is no significant relationship between poverty and unemployment in Nigeria.

 

1.6 Significance of the Study

This study deals with the population and the problem of unemployment in Nigeria. The economy of the Nigeria is characterized by high population growth. The country faces a great challenge in generating adequate job opportunities for their teeming population. Nigeria population is over increasing with limited number of job opportunities. Therefore this study would be significant in the following ways:

It would present an empirical proof of the relationship between population growth and unemployment in Nigeria.The study would also contribute to knowledge and serve as a reference tool for further research.This research will assist government and employer of labour to share their experiences in dealing with the more difficult challenges of try to balance the issue of population growth and unemployment which will demand policy principles to application for better economic growth.

1.7 Scope of the Study

The study focuses on the effect of population growth on unemployment in Nigeria between 1980 and 2016. The study will also ascertain if the population growths affect unemployment in Nigeria, ascertain the effect of mortality rate on unemployment in Nigeria and determine the effect of poverty on unemployment in Nigeria