ECONOMETRIC ANALYSIS OF THE IMPACT OF URBANIZATION AND UNEMPLOYMENT
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ECONOMETRIC ANALYSIS OF THE IMPACT OF URBANIZATION AND UNEMPLOYMENT
Chapter one
INTRODUCTION
1.1 Background of the Study
Urbanisation is a social process or transformation in which a significant part of the population of a country lives in cities. Onah (2001) observed that urbanisation no longer denotes merely the process by which persons are attracted to a place called the city and are incorporated into its system of life;
it rather refers to the cumulative accentuation of the characteristics, distinctive of the mode of life, which is associated with the growth of cities or urban areas, and eventually
People are aware of changes in the direction of the recognised urban pattern of life. Also, the new Encyclopaedia Britannian (1995) defines urbanisation as the process by which a significant number of people are permanently concentrated in a relatively small area, resulting in urban regions.
From the foregoing, it may be concluded that urbanisation refers to the transfer of people from rural areas largely concerned with agriculture to other large metropolitan areas whose activities are mostly focused on government, trade, manufacturing, or related interests.
According to Tacoli (1998), urban inhabitants are predominantly involved in industrial production and services. In censuses and other statistical exercises, urban population is typically defined as residence in settlements of a specific size.
In Nigeria, an urban centre was classified during the 1991 census as a community of 20,000 or more people (Nigeria Migration and Urbanisation Survey 1993). The national census of the Philippines defines urban areas as any places with a population density of at least 500 people per square kilometre (Manning and Jayasunya 1996).
Urban areas are viewed as having a higher concentration of blue-collar jobs, and urban people are regarded to be more deserving, well-fed, and exposed to contemporary society than rural dwellers.
According to 200mers and Kleinpenning (1996), the high cost of food and the presence of peripheral villages indicate a considerable involvement in the metropolitan food supply chain.
Large-scale farms and businesses, whether public or private, are common in urban settings. The urban labour market is separated into formal and informal sectors (Mazumdar, 1989).
Wages in the formal sector are relatively high and are thus safeguarded from being bargained lower by employers of lower-income labour in the urban informal sector. Mazumdar (1999) observes that the informal sector is easy to enter.
Casual labour employed by the day is part of the urban informal sector. Workers in the transportation and construction industries, as well as small business entrepreneurs.
The formal sector encompasses public and large-scale businesses, private major companies, and public institutions. Economic activity is evident, as are foods from rural to urban areas.
These economic activities create vast marketplaces for the sale of items in large numbers, as well as exposure to social amenities such as decent roads, electrification, improved communication, good water supply facilities, good housing, proper sanitation, and so on.
According to Simelane (1995), the presence of more service locations that provide a variety of services to urban regions attracts rural residents, contributing to rural-urban migration.
The presence of such service supply centres for agricultural inputs and consumer goods in rural areas would play an important role in rural development, reducing rural urban migration, which is the primary cause of urban young unemployment.
1.2 Statement of Problem
In the face of diminishing development and economic restructuring, Africa’s job situation has deteriorated, making workforce absorption difficult.
In particular, the issue of what is commonly referred to as youth unemployment has become widely recognised as one of a number of socioeconomic issues plaguing many developing countries, particularly those in Africa (Curtain 2000, 120 1999).
However, studies revealed that Africa, compared to other parts of the world, has the greatest section of young.
In 2000, her population was 36.7 percent, compared to the global average of 27.3 percent (Curtain). In absolute terms. The African continent currently has an estimated 122 million youths (Chigunta 2002).
During the early years of independence in the 1960s and 1970s, young people did not represent a significant social challenge. As a result, the government and financial institutions did not make young unemployment a priority.
Since then, however, worries have grown about young people’s socioeconomic status and the chances for generating new employment opportunities for them (Gibson, 1990).
Urban youth unemployment is a significant component of widespread unemployment, which is a big problem in Nigeria. With a stagnating economy and poor economic growth rates, demand for labour has decreased, resulting in high levels of urban
Youth Unemployment.
1.3 Aim and Objectives
The primary goal of this research is to scientifically investigate the impact of urbanisation and unemployment on economic development. This basic goal could be broken down into the specific objectives listed below.
(1) To investigate the impact of the urbanisation trend on Nigeria’s unemployment rate.
(2) Examine the effects of unemployment on economic development.
(3) To study the relationship between urbanisation and the level of output.
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