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Pages: 75-90
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Chapters: 1 to 5
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CHAPTER ONE
INTRODUCTION
1.1 Background of the study
Given Nigeria’s concerning rates of unemployment and population growth, policymakers are presently very concerned about creating effective and efficient economic measures to halt this undesirable trend. Since rapid population growth may have detrimental effects on the welfare of the populace, one of Nigeria’s biggest population growth issues in recent years is not only a numerical one but also one of human welfare and development. With 182,201,962 people and a population growth rate of 2.54%, Nigeria is presently the eighth most populated nation in the world, according to latest data released by PMC (Population Media Centre, 2015). If nothing is done, it is predicted to quadruple over the next 28 years.
According to Amartya Sen (1999), if development means raising people’s standard of living, including their incomes, health, education, and general well-being, and if it also means enhancing their sense of self-worth, respect, dignity, and freedom of choice, then the most crucial question regarding population growth in Nigeria is how it affects or increases the likelihood that the country will achieve its development goals for both the present and future generations. In addition, how will Nigeria manage the enormous growth in the work force in the next decades? Will there be plenty of work opportunities? Or would just preventing the rise in unemployment be a significant accomplishment?
In the first quarter of 2016, the National Bureau of Statistics reported that the labour force participation rate was 71.1% and the national unemployment rate was 5.5%. Compared to men (5.2%), women had the greatest unemployment rate (5.7%).
Given the aforementioned concerns, this research aims to address these important topics by assessing how Nigeria’s population growth rate affects the country’s unemployment rate. This is due to the fact that a nation’s population growth rate continues to be a crucial component of economic development and, if improperly managed, has the potential to exacerbate the economic plague of poverty. On the other hand, population growth continues to be a crucial component in determining a nation’s investment potential and may be helpful in supplying a workforce for the production of products and services to improve economic development. It may have both positive and negative effects on that nation’s economy.
Since rapid population growth is typically accompanied by a proportionate increase in the labour force supply, empirical evidence also suggests that rapidly growing population rates have serious implications for the provision of decent work or productive employment. This means that the rate of job creation should be equal to the rate of labour force supply.
The labour force supply rate in Nigeria has surpassed the job creation rate, suggesting that the unemployment or young unemployment rate has been rising quickly. Stated differently, the number of job seekers rises faster than the number of open positions. A scenario like this puts society in serious peril.
A research conducted by the United Nations in 2006 examined the effects of a high rate of population expansion on the unemployment rate. The results of their study unequivocally demonstrate that workers are compelled to return to the traditional sector of the economy, which has low productivity and subsistence wage levels, or to unproductive service occupations when the nation’s ever-increasing labour force cannot be accommodated in the modern economic sectors. Mass poverty slows industrialisation, which lowers the demand for produced products, and this abundance of inexpensive labour tends to impede technical advancement. The ultimate consequences include low labour skills and low saving rates, which impede the full development and utilisation of natural resources; unemployment, dissatisfaction, and disappointment; a high prevalence of social vices and criminal activities, including drug trafficking, robbery, prostitution, and underdevelopment traps; widespread extreme poverty and hunger (also known as “absolute poverty”); and restlessness among young people. If left unchecked, apathy, cynicism, and revolution may also follow.
1.2 Statement of the problem
As was previously said, unemployment and a faster rate of population expansion lead to major societal issues. In addition to having an impact on Nigerians’ economic and sociopolitical lives, it challenges international organisations and donor agencies to address the issues raised above and urges them to examine the measures taken by the nation’s policymakers to halt and reverse this undesirable trend.
Nigeria’s unemployment rate is impacted by population increase, which affects not only the current generation but also future generations. Nigeria’s unemployment rate increased from 10.4 percent in the last quarter of 2015 to 12.1 percent in March 2016, the highest level since December 2009, according to the country’s Bureau of Statistics (2016). Employment increased by a pitiful 0.12 percent to 69 million, the labour force increased by 2 percent to 78.4 million, and the number of jobless people increased by 1.8 percent to 9.485 million. In the meanwhile, young unemployment rose from 19 percent to 21.5%. Between 2006 and 2016, Nigeria’s unemployment rate averaged 9.04 percent; it peaked at 19.70 percent in the fourth quarter of 2009 and fell to a record low of 5.10 percent in the same quarter of 2010.
Nigeria’s fast population growth is also linked to high unemployment rates, which range from 17% for the general population to 60% for young people annually. This is because there are fewer job openings than there are people looking for them, which slows down the economy because a significant amount of available resources are spent rather than used to create growth.
Because researchers cannot agree on the direction of causation between the effects of population expansion and unemployment, the influence of population increase on Nigeria’s unemployment rate has continued to generate contradicting findings. When creating policies for the country, this might cause issues among the decision-makers.
Additionally, the disparate approaches taken by various researchers over time also lead to conflicting submissions and conclusions made by the scholars, which can cause methodological issues for future researchers who might wish to conduct additional research on this subject. For example, several academics and researchers have found a direct association and long-term, substantial influence between Nigeria’s unemployment rate and population growth rate. Others, however, demonstrate that there is no direct link or long-term, meaningful influence between Nigeria’s unemployment rate and population increase.
In order to determine whether there is, in fact, a direct causal relationship, a significant effect, and a long-term relationship between population growth and unemployment level in Nigeria between 1991 and 2015, this study aims to reconcile the divergent opinions and perceptions of the various researchers and scholars.
1.3 Objectives of the study
The purpose of this study is to determine how Nigeria’s population expansion has impacted the country’s unemployment rate from 1991 to 2015, both for the populace and the economy. In order to provide the best policy suggestions, it is necessary to evaluate the several alternative policy alternatives that are accessible regarding the effect of population increase on unemployment in Nigeria. The particular goals of this research are:
[1] To ascertain if Nigeria’s population growth and unemployment rate are correlated over the long period.
[2] To look at how Nigeria’s population growth and unemployment rate are related.
[3] To address the issue of population growth rate and unemployment level in Nigeria, the Ordinary Least Squares approach was used to determine the statistically significant impact of population growth on unemployment level.
Research questions
1 What is the long-term correlation between Nigeria’s unemployment rate and population growth rate?
Is there a causal connection between Nigeria’s unemployment rate and population growth?
· Does Nigeria’s unemployment rate significantly depend on the pace of population growth?
1.5 Research Hypothesis
First hypothesis
H0: Nigeria’s unemployment rate and population growth do not correlate over the long term.
H1: Nigeria’s population growth and unemployment rate are correlated over the long term.
H0: There is no correlation between Nigeria’s unemployment rate and population growth.
H1: In Nigeria, the rate of unemployment and population growth are causally related.
H0: Nigeria’s unemployment rate is not significantly impacted by population increase.
H1: Nigeria’s unemployment rate is significantly impacted by population increase.
1.6 Importance of the Research
The importance of this research cannot be overstated. First and foremost, the research aims to assess the relationship between the nation’s unemployment rate and population growth rate. Policymakers would greatly benefit from the knowledge acquired as a foundation for creating policies and strategies to address the persistent problems of the nation’s unemployment rate and unregulated population growth rate.
The ultimate benefit is that if population growth is appropriately restrained and unemployment is effectively addressed, the nation’s productivity will rise, along with its economic growth and development and the citizens’ standard of living.
The government and its agencies will benefit from this research study since the results will serve as a blueprint for government policies aimed at reducing unemployment and containing population growth in order to inform citizens about the value of family planning.
1.7 Research Scope
This study’s scope will be restricted to using secondary data on population estimates between 1991 and 2015. Additionally, it will be restricted to the analysis of unemployment trends from the World Bank data source, the CBN statistical bulletin, and the National Bureau of Statistics for the year under consideration. The rates of population growth and patterns in unemployment from prior years are not of importance to it. In order to prevent generating a spurious regression result, the secondary data collected from the aforementioned sources will be used to test the stationarity of the data using the unit root test (ADF). Additionally, a regression result will be run to determine whether the impact of the population growth rate on the unemployment level is statistically significant. Using the Johansson co-integration test, the data will also be utilised to ascertain if there is a long-term correlation between the effects of population increase and unemployment levels. Lastly, using the Granger causality test, the data will be utilised to verify the causal link between Nigeria’s unemployment rate and population growth rate.
1.8 Terms Definition
Absolute poverty is a state in which people are severely deprived of necessities such as food, clean drinking water, sanitary facilities, housing, health care, education, and information.
Development: According to Amartya Sen (1999), development is the elimination of the main causes of tyranny, poverty, and lack of freedom as well as of insufficient economic possibilities, systematic social deprivation, disregard for public infrastructure, intolerance, and excessive government actions.
According to the Department of Economic and Social Affairs (2006), decent work or productive employment entails opportunities for work that is productive and pays fairly, job security and social protection for families, improved opportunities for social integration and personal growth, the freedom to organise and voice concerns, the ability to participate in decisions that impact one’s life, and equal treatment and opportunity for men and women.
According to Michael P. Todaro and Stephen C. Smith (2011), economic growth is a gradual process that raises the economy’s productive capacity over time, resulting in a rise in national production and revenue.
Family planning is the process of limiting the number of children in a family and the time between births, usually by voluntary sterilisation or artificial contraception. Family planning, according to the WHO, enables individuals and couples to plan for and achieve the number of children they want as well as the spacing and timing of their deliveries. It is accomplished by treating involuntary infertility and using contraceptive measures. The capacity of a woman to restrict and spread out her pregnancies directly affects both the result of each pregnancy and her overall health and well-being.
The term “labour force” or “work force” refers to the whole population of persons who are 18 years of age or older and who fit the International labour Organization’s definition of an economically active population. Everyone who provides work for the creation of commodities and services throughout a certain time frame. Both the employed and the jobless are included. In general, the labour force comprises the armed forces, the unemployed, and first-time job seekers, but excludes homemakers, other unpaid carers, and workers in the informal sector. This is true even though national practices differ in how they treat groups like the armed forces and seasonal or part-time workers.
The ratio of the labour force to the total size of their cohort (the country’s population of the same age range) is known as the labour force participation rate, or LFPR (or economic activity rate, or EAR). The phrase may refer to those who do physical work and often leaves out employers or management. It could also refer to everyone who is available for employment.
Underemployment is the state in which members of the labour force have occupations that are either insufficient for their training or financial requirements, or that are less than full-time or regular positions.
The proportion of the entire labour force that is jobless yet actively looking for work and eager to work is known as the unemployment rate.
An unemployed person is someone who is actively seeking employment but does not currently have a position, according to the International Labour Organisation (ILO). The number of persons who are both unemployed and seeking for work is known as the unemployment rate. This metric, which confirms but does not predict long-term market patterns, is regarded as a lagging indicator.
The term “unemployed population” describes people of working age who, during the reference week, either (a) did not have a job, (b) were willing to accept one if one were available, or (c) actively sought employment over the preceding four weeks. (National Statistical Bureau, 2015)
Youth unemployment rate: The percentage of the young labour force that is jobless is known as the youth unemployment rate (MDGs, 2015). Those between the ages of 15 and 24 are considered young folks. All adults above a certain age who were (a) jobless, (b) actively looking for employment, and (c) available for work during the reference period are considered unemployed.
labour supply: The quantity of hours that individuals are willing and able to work at a certain pay rate is known as the labour supply. It is the quantity of people who are able and willing to work at a certain salary in a given sector or employment. The elasticity of labour supply determines how much an increase in the going rate in a certain profession causes the supply of workers to grow.
The pace at which the number of people in a population grows over a certain time period, represented as a percentage of the original population, is known as the “population growth rate.” The change in population over a unit of time is specifically referred to as the population growth rate, and it is often stated as a percentage of the initial population size. This may be expressed as a formula that is good for a short enough period of time.
Citations
Sen, Amartya (1999). Oxford: Development as Freedom. Oxford University Press.
Economic and Social Affairs Department. (2006). Decent labour and full and productive employment in the United States.
Stephen C. and Michael P. Todaro. Smith, M. (2011). Eleventh place for economic development. Addison-Wesley, Pearson, San Francisco.
Bureau of Satistics National. (2016). Statistics about unemployment.
