IMPACT OF POPULATION GROWTH ON UNEMPLOYMENT IN NIGERIA: AN EMPIRICAL ANALYSIS.

ABSTRACT

Economists overtime have attributed population explosion as one of the chief causes of unemployment in developing economies. This study examines the impact of population growth on unemployment rate in Nigeria between 1985 and 2015. The study adopted the econometric techniques of the unit root test, cointegration test, multivariate regression analysis and the pair-wise granger causality test for the analysis of data. The results revealed that population growth rate; per capita income and unemployment rate except total population became stationary at the first-order difference. It was also found that a long-run equilibrium relationship existed between population growth and unemployment. Furthermore, the regression result showed that population growth rate, total population and per capita income significantly and positively contributed to unemployment situation in Nigeria within the period estimated. The study later proffered various policies options which the government can implement to address the issue of unemployment, curb high population growth rate and achieve higher living standards for its populace.

 CHAPTER ONE

1.1   BACKGROUND TO THE STUDY

Nigeria is the most populous nation in Africa and the 8th in the world with an estimated figure of about 170 million people based on the facts released by the National Population Commission (NPC, 2012). In addition to this, the nation boasts of being the largest economy in Africa as the GDP figure for 2013 and 2014 stood at N13, 526.25 and N14, 475.38 billion respectively (Economic Watch, 2015).  Despite these magnificent feats, the country is still faced with several developmental, economic and political challenges such as unemployment, poverty, corruption, income inequality, population explosion and political instability.

Nigeria has a growing population, which can equally be referred to as increasing population. The census conducted in Nigeria in 1991 put Nigeria’s population at 88.9 million people with growth rate of about 3% and the total fertility rate as disclosed by the Post Enumeration Survey (PES) at about 6%. From the statistics obtained at the 2006 Nigerian population census, Nigeria’s population stood at 140,003, 542 (NBS, 2009).  The growth rate then was less than 3% and the population has the tendency of doubling itself in less than 23 years (Odusina 2013). The United Nations estimated Nigeria’s population to be around 150,003, 400 and further corroborated that Nigeria’s population is the largest in Africa and ranked 7th among the populous countries globally (United Nations, 2009).

The population of Nigeria is rising rapidly. A rapid rise in population can be attributed to three main factors which are birth rate, death rate and migration (Yesefu, 2002). In the Nigeria population experience, migration has not contributed to rapid population, because most of Nigeria’s technocrats, experts and professionals immigrate to other countries for an improved means of livelihood (Odusina, 2013). If a rising population is brought about as a result of increase in birth rate, there will be larger proportion of children and young people in the population. On the other hand, if rapid population is a result of decrease in death rate, the adults and older people will constitute a larger percentage of the total population. Furthermore, if a rising population is due to high net migration, the population will constitute a large proportion of the economically active people, between the ages of 15 and 60 years. According to National Demographic Health Survey (NDHS, 2003), crude birth rate in 1990, 1991 and 2003 stood at 39.0, 44.6 and 42.0. This evidences that Nigeria’s rapid population is primarily as a result of high birth rate.

The population of Nigeria has gathered momentum over time. Population will continually increase event if there is usage and practice of contraceptives, family planning system and birth control. Increasing population is a burden to the government especially in less developed countries, which is considered injurious to the citizenry living standard and the socioeconomic development of the country.

Unemployment occurs as a result of the insufficiency of jobs to commensurate with the growing population, even those who are employed live with the fear of being rendered unemployed due to job insecurity, economic recession and retrenchment of workers. (Akiri etal. 2016). The term ‘unemployment’ can be applied to any factor of production that is idle and under-utilized. With precise application to labour, unemployment occurs when active and able-bodied men are actively seeking jobs but unable to find one. Underemployment is a variant of unemployment which arises when labour is working below full capacity or not fully utilized in production.

Unemployment has been a hindering factor to the attainment of sustainable development. In Nigeria, unemployment is more prevalent among the youths. Every year, tertiary institutions turn out thousands of graduates in large mass with no absorptive capacity in the labour market. Moreover, young people are more likely to be employed in jobs of low quality, poor working conditions, poor remuneration and engagement in dangerous works or receive a short term informal employment arrangements. Unemployment has been regarded as global economic problem and has been tagged as a barricade to social and economic advancement especially in developing nations, Nigeria inclusive. Unemployment tantamount to huge wastage of a country’s human resources, generates welfare loss in terms of social output, leads to low income and increases the cost of living ( Umo, 1999).

The inadequate employment situation of youths has resulted into a number of socio-economic, moral and political vices such as armed robbery, thuggery, vandalisation of government assets, corruption, prostitution, rural-urban migration, high dependency ratio, frustration, corruption, depression, wastage and underutilization of human resource. The prevalence of unemployment has birthed the presence of poverty in the nation. Successive government has employed several strategies to curb both challenges, but the results achieved so far have not been remarkable.

1.2                                          STATEMENT OF PROBLEM

Nigeria is bedeviled with a dual-problem of high population and high unemployment. The jobs available in the labour market are not commensurate with the teeming number of unemployed persons. Rapid population growth is inimical to the economic and social development of a country. There will be little time or no time to adjust the economy to development efforts. Increasing population has the tendency of eroding the benefits of economic development and producing disastrous effects on living conditions of the citizenry if not properly checked.

Nigeria population requires urgent attention, regulation and control due to its excessive growth rate. Nigeria need to learn from the Chinese population experience, when the latter country encountered many challenges linked to population growth. A large number of people lived in poverty; they were unable to deal with the aftermath of flood and drought. This occurred because the Chinese government never made any strategic plan to avert the ugly incident (Clunas, etal., 2008).

The population situation of Nigeria and issues related to it needs to be discussed to expose many population-related factors to the consciousness of the people. For instance, Nigeria is suffering from high rates of poverty and unemployment. Moreover, there is mass migration of people from rural areas to urban areas, thereby creating social vices. This is because the available industries are unable to employ all the participants in the labour market.

For Nigeria to overcome these developmental challenges, effective policies need to be formulated to raise domestic production of food, create jobs; reduce absolute poverty, lower population growth amongst many other things.

1.3                                        OBJECTIVES OF THE STUDY

The objectives of the study are:

1. To examine the impact of population growth on unemployment in Nigeria.
2. To ascertain if there is long-run equilibrium relationship between population growth and unemployment in Nigeria.

1.4                                                    RESEARCH QUESTIONS

The study is targeted to providing satisfactory answers to the following research questions:

1. What is the impact of population growth on unemployment in Nigeria?
2. Is there long-run equilibrium relationship between population growth and unemployment in Nigeria?

1.5                                                 RESEARCH HYPOTHESIS

A hypothesis is a supposed or proposed statement made on the premise of limited evidence, which serves as a starting point for further investigation. In accordance with the objectives of the study, the hypotheses are hereby stated as follows

1. H01: Population growth has no significant impact on unemployment in Nigeria.
2. H02:  There is no significant long-run equilibrium relationship between population growth and unemployment in Nigeria.

1.6                                                     METHOD OF ANALYSIS

Secondary annual-time series data on population growth and unemployment is used for the empirical analysis. A model is formulated in which unemployment (proxy as unemployment rate) is employed as the explained variable while population growth (proxied by population growth rate and total population) are adopted as the explanatory variable. Per capita income and GDP growth rate were also incorporated as explanatory variables in the model.

The ordinary least square technique (OLS) via the simple regression analysis is used to estimate the numerical values of the parameter estimates. The OLS technique was picked due to the optimal properties it possesses such as linearity, unbiasedness, efficiency, consistency and sufficiency. Furthermore, the OLS technique was used because it is computational procedure is quite easy and is widely used in estimating coefficients of economic relationship in economic researches. Furthermore, the econometric techniques of Augmented-Dickey Fuller Test, Johansen Cointegration Test and Granger Causality Test will be employed.

1.7                                       JUSTIFICATION FOR THE STUDY

It is no gainsaying to assert that the Nigerian economy is in a state of mess. Despite the enormous mineral, natural and human resources available in the country, Nigeria has been unable to mobilize these resources to meet the needs of its teeming population. High population growth that ought to be an ‘asset’ to the nation in her quest for economic development, has rather turned to a liability, because no strategic and sound  measures has been put in place to ensure high population growth is proportional to the jobs available. To this end, as a result of salvaging the economy from the mirage of high incidences of population growth and unemployment has necessitated the need for this study.

It is therefore believed that the study through its findings and policy recommendations would be useful to policy makers, government agencies, stakeholder in polity and future researchers on how population growth can be regulated and unemployment reduced to be barest minimum.

1.8                                                 SCOPE OF THE STUDY

The study examines the impact of population growth and unemployment in Nigeria by prioritizing on a thirty-year period spanning from 1985-2015. This time frame is picked in order to examine the recent trend in unemployment and population growth in Nigeria.

1.9                                             ORGANISATION OF THE STUDY

This study is sectionalized into five chapters.

Chapter one contains the general introduction-background to the study, statement of problem, research objectives, questions and hypothesis that guides the study.

Chapter two presents the review of related literature based on conceptual review, theoretical review and empirical review.

Chapter three delves into the structural composition of the study by focusing on trend in population growth in Nigeria, trend in unemployment in Nigeria, factors responsible for high population growth and unemployment in Nigeria, past measures formulated to regulate population in Nigeria and implications of a rapidly growing Nigeria population.

Chapter four presents the research methodology and empirical analysis and the last chapter focuses on the summary of findings, conclusion, policy recommendations and suggestions for further studies.

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