Impact of Unemployment on Economic Growth in Nigeria from 1990–2020

Abstract

This study investigated the impact of unemployment on economic growth in Nigeria from 1990 to 2020. Population rate, unemployment rate and labour force were used as independent variables while Gross domestic product (GDP) as dependent variable. Annual time series data on our targeted variables were obtained from secondary sources including the Central Bank of Nigeria annual statistical bulletin, World Bank development indicators (various years). The Eview9 Statistical Software was employed to analyze the data empirically. The Unit root test shows that Gross domestic product, unemployment rate and labour force variables to be evaluated are all stationary after first deference I(1) while population rate was stationary at level I(0). The data were analyzed using the Autoregressive distributed lag (ARDL). From the results of the ARDL estimates it was revealed that among others, unemployment rate impact negatively on GDP but significant only in the long run. Population rate also impacts on gross domestic product but only significant in the short run. Labour force impact positively on Gross domestic product and statistically significant in the short run. The study recommends amongst others that government should create jobs mostly for the real sector, that is agriculture and manufacturing sectors –The Nigerian agricultural sector employs about seventy percent of the population mostly at subsistence level. If the Nigerian government supports this sector by making loans available and affordable for those in the agricultural sector, it would boost agricultural output, increase gross domestic product and decrease unemployment rate in Nigeria.