The Unexplained and Impact of Unemployment in the Nigerian Economy: An Econometrics Analysis

By Money, Udih | Researchers World, October 1, 2015 | Go to article overview

The Unexplained and Impact of Unemployment in the Nigerian Economy: An Econometrics Analysis


Money, Udih, Researchers World


(ProQuest: ... denotes formulae omitted.)

INTRODUCTION:

Unemployment reduction is a major goal of every responsible government all over the globe. There is always friction in the market; as such, zero unemployment cannot be attained. There is unemployment where it is not possible for people who are eligible, able and willing to work cannot find jo bs (Osamwonyi, 2012). Unemployment is one of the greatest challenges facing Nigeria; it has a rising trend over the years. Unemployment in Nigeria is the proportion of labour force that was available for work but did not work in a period. Labour force in Nigeria is made up of all persons aged 15 - 64 years excluding students, retired persons, and housekeepers, not interested to work. (Mankiw, 1994), says unemployment stands for wasted resources.

Unemployment has been on the increase, and (Ekpo, 2011) is of the view that Nigeria's unemployment situation is unacceptable. This paper is to find out what the causes of unemployment in Nigeria are the possibility of finding solutions as well as the unexplained unemployment, with respect to econometric study.

Unemployment exists if the number of people who are willing to work and seeking jobs exceeds the number of declared vacancies (Abedi, 2011), (Anyanwu, 1995). People who are legally qualified, willing to work and seeking jobs cannot secure gainful employment in a situation. Thus, the supply of labour force exceeds the demand for labour force; it is a situation where there are more men or applicant than available jobs. Unemployment is the non -utilization of labour force in any productive activity for a reward in terms of wages or salaries (Ta Wiah, 2006).

THEORETICAL UNDERPINNING:

An unemployed person is someone who has the required qualification, ability and readiness to work and looks for work but cannot find one. Thus, the person is involved in the labour market with the mind of getting a look. This paper uses the model of L = f(u) i.e. labour force is a function of unemployed labour.

Where: L = Labour force

U = Unemployed Labour

We are looking at Labour force and Unemployed labour force. Labou force is represented as y-variable and unemployed labour force is represented as x-variable.

CAUSES OF UNEMPLOYMENT IN NIGERIA:

· Immobility of labour with respect to occupational and geographical, compounds the issues of unemployment.

· Economic growth and development is slow, thus stagnated industrialization and employment generation.

· Production made is capital intensive rather than labour intensive, this also encourages unemployment.

· Wage structures in cities and the movement of people from villages to cities is a major cause of unemployment.

· Poor educational facilities and poverty results in low level of education, cause unemployment.

· Lack of educational curricula that tilt towards low-level white collared workers, concerned with low clerical work only.

· Over-regulation in the economy hider's business expansion and this curtails job creation.

· Wage rigidity causes unemployment; it is failure of wages to adjust until labour supply equals labour demand.

UNEMPLOYMENT IN NIGERIA:

In Nigeria, we Are faced with a lot of unconducive economic conditions like poor electricity, poor roads, poor communication system, insecurity, kidnapping, poor infrastructure, etc, have lead the close down of many organisations, and this have thrown many people into the labour market. Some years back so many textiles factories have closed down, and the trends still continues, and the chief cause is poor electricity, organisations rely heavily on generations to power their factories; and its results is inefficiency and increases unit cost of production and their produces are not competitive. It is interesting to note that the country is a dumping ground for all imports.

Other factors that lead to unemployment in Nigeria include unconcerned attitude of local Governments to create employment, non-diversification of the economy. …

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