Professional Documents
Culture Documents
Unemployment
Unemployment
INTRODUCTION
jobs but they are unable to find it. IMF report (1998) defines
next two weeks. People who voluntarily do not want to work, full
unemployed category.
1
Dramatic increase in the level of unemployment is a big
individual level and national level. Available data show that the
with respect to the oil boom of the 1970s, the outrageous profits
2
econometrically examine the determinants of unemployment in
Nigeria.
STATEMENT OF PROBLEM
bodied persons who are willing to accept jobs at the prevailing rates
3
yet unable to find placements (Onah, 2001). According to the
rates declined from 6.1% and 2.8% in December 1996 to 6.0% and
previous years.
4
ii. Does foreign direct investment affect the level of unemployment in
Nigeria?
iii. Does inflation affect have any effect on unemployment?
OBJECTIVES OF STUDY
For all its vaunted wealth of mineral resources and the highly
5
petroleum stood at 67.0 per cent and 0.6 per cent respectively; by
1974 the proportions had been reversed to 23.4 and 45.5 per cent
down further to 15.5 per cent and 28.0 Per cent respectively. The
per cent arid 7.0 Per cent respectively. As at the end of 1993, the
share of agriculture (at 1984 factor cost) had climbed up once again
to 38.10 Per cent of GDP with petroleum oil going down to 12.66
from the 13.47 Per cent in 1992; the share of manufacturing had
the bulk of the employment for Nigerians, provides the bulk of the
6
needs of the household sector but supplies only a small part of the
bought very little from manufacturing. Iii effect, the three main
The oil boom of the 1970s and early 1980s raised the
for less than 15 per cent of total manufacturing output, Nigeria has
and for intermediate goods and raw materials but even for food. The
sudden decline in oil prices in the mid 1980 s, which has persisted
to date, the near insatiable demand for imports and the weakening
reduce the size and scope of their expenditures and budget deficit.
7
The Obasanjo regime (1976 - 1979) had bequeathed to the
export proceeds stood at 20.4 per cent in 1978, 15.4 per cent in
1980, 30 per cent in 1981 and 61.5 per cent in 1982. It was rising
growing at 2.5 per cent per annum and debt service running at
some 4 per cent of the Gross Domestic Product, it means that just
most of the period between 1960 and 1970; it then recorded a very
large surplus in 1973 and 1974. Within two years, the government
surplus in short order; three years later, by 1978, the account had
8
Shagari administration had turned the tables into a deficit of $5.3
standstill.
9
The thrust of the measures for deregulation was to promote
discount houses.
10
guidelines and regulations by the Centra1 Bank to the banking
institutions.
gains were most impressive and noticeable in the first three years of
spending and the nature of its financing from 1990 to 1993 wiped
11
public policy to 27.5 per cent in 1989; it jumped to 40 per cent
Product in the three years 1989 – 1991 and 10.1 and 12.3 per
supply (Ml) rose by 17.1 per cent in 1987, 24.8 per cent in
1988 and on the average, by 41.5 per cent between 1988 and
1991; it rose further by 66.4 per cent in 1992 and 54.6 per
1991 and 1992 and by 52.8 per cent between 1992 and 1993;
to primary school level and took some six weeks for job
12
search, but by the mid 80 s the bulk of the unemployed had
when SAP was introduced. Efforts to stem the surging demand for
lasting effect and to prevent the widening of the gap between the
official and parallel market rates. In February 1993 a new rule was
13
the Central Bank of Nigeria. That arrangement caused a withdrawal
of virtually all excess liquidity from the financial system for most of
the time. When all efforts to stabilise the foreign exchange rate
rapid and significant shifts in interest rates were causes for serious
concern because such high rates could and did retard productive
In 1994, the authorities felt that the prevailing interest rate levels
UNEMPLOYMENT
14
The economically active population (labour force) or working
but are unable to find suitable paid employment. The next category,
full time students, invalids, those below the legal age for work, old
15
Available data show that the Nigerian economy grew relatively
in the greater parts of the 1970s, with respect to the oil boom of the
employment factor and also distorted the revenue bases for policy
in which people who are willing to work at the prevailing wage rate
for and seeking for work, including people who have lost their jobs
and those who have voluntarily left work (World Bank, 1998). The
16
around which the economy fluctuates. In a recession, the actual
TYPES OF UNEMPLOYMENT
unemployment.
Structural Unemployment
17
readily absorbed into other industries and thus become
unemployed.
required.
much more difficult for people to find new jobs. Both the
and some areas have taken many years to adapt and reduce
18
a mismatch between the demand for labour and the ability of
the workers.
Frictional Unemployment
may exist, yet the workers may be unable to fill them either
are not aware of the existence of such jobs. They may remain
the right job. This creates unemployment while they look and this
efficiently the job market is matching people to jobs, the lower this
information and people don't get to hear of jobs available that may
19
be able to find a job that suits them more quickly when the
Seasonal Unemployment
inherent nature of such industries. The ice factories are closed down
to seasonal unemployment.
Cyclical Unemployment
the operation of the business cycle. This arises at a time when the
when the aggregate demand falls below the full employment level, it
20
characterized by an economy wide shortage of jobs and last as long
Disguised Unemployment
withdrawn from agriculture. This can also be seen when the growth
21
when there are already enough workers. Therefore, the marginal
painkiller: you numb the pain but the problem doesn’t go away and,
Recessions
22
Over-Regulation
for you to find work, and this will be especially critical for students
and for anyone who finds him or herself out of work when they are
there are too many regulations that stifle job creation efforts. This
employed having a job for life, and those who do not have a job are
unable to find anything, and are forced to live on welfare. There are
too few job offers for the demand, a shortage that leads to poverty
economy will not create new jobs. It will, in fact, make the amount
Skills
number of skills. If the person does not have the skills for a job,
job. When the types of jobs in a certain area change, then people
23
without the right skills are either able to move to a different area or
they are unable to find work. In the meantime, these new jobs are
filled up with new people, who do have the skills these require. A
keep their jobs, but they are not given the possibility to improve
Lack of Information
jobs are there, then they will not take them. It is also important
be able to bring information to the people who need it. Job centers
do that, and the more efficient they are, the more effective they
are.
24
EFFECTS OF HIGH RATES OF UNEMPLOYMENT
challenge for the economy in two major areas. One such area, it has
eroded the funding base and secondly, it has increased the demands
less than the potential GNP, that is to say; what is possible of full
potential GNP and this can be possible only when the employed
25
efficient level of capacity. Unemployment is an economic problem
UNEMPLOYMENT IN NIGERIA
the Federal Civil Service rose from 2, 724 in 1980 to 6,294 in 1984
26
declined from 7.1 percent in 1987, to as low as 1.8 percent in 1995,
after which it rose to 3.4 percent in 1996, and hovered between 3.4
and 4.7 percent between 1996 and 2000 (Douglason et al, 2006).
give credence to the report. We recall that two years ago, the
population lived below the poverty line, but since then no concrete
27
measures have been taken to address the situation. Suddenly we
closed shop across the country and the trend continues. Why? This
28
makers, welders, aluminium window fitters, tailors, etc who cannot
just to keep body and soul together. The country is faced with a
all professional callings has become the order of the day, while the
it difficult for them to get recruited. This brings to the fore, the need
29
POLICIES TO MINIMISE UNEMPLOYMENT IN NIGERIA
demand for workers rises, it is logical that they will demand greater
lower real wages for the same work. Real wage unemployment is
30
Wage 'stickiness' - Employees on long term contracts will
inflexible
term contracts and ensuring that the minimum wage level does not
Frictional Unemployment
31
two main ways. Firstly, increasing the knowledge of the local
Cyclical Unemployment
wages are, unemployment will rise of fall. There are clear links
rise, as demand for good and services falls. This could result in a
32
dig huge trenches and fill them in again will help, as it
encourage more people into work, and also increase the level
effect
33
Not every increase in demand and production has to be met by
Geographical Unemployment
34
unemployment, thus reducing regional variations in
Structural Unemployment
jobs as they become less desirable the longer they are unemployed.
35
Reducing geographical immobility - could result in no need
in demand somewhere.
programmes:
36
• Special public works
objectives achievable.
(NEEDS)
37
potential of every citizen so as to become the largest and strongest
termed reform based development strategy, and action plan for the
reduce unemployment.
38
positively affected by variations in exports but is insignificant. So
they did not found any evidence of export led growth in Turkey.
unemployment.
model. The major variables they used were interest rates and
unemployment.
39
sizable amount in unemployment so the use of monetary theory can
plan.
40
1983-1994. He used Hausman specification test & concluded that
41
Though a lot of work has been done on relationship between
analyzing economy.
a. Data Collection
b. Model Specification
The model specified for this study was used to evaluate the
42
Where UR stand for unemployment rate, PG represent population
Inflation rate.
UR = 0 + 1 INR + 2 PG + 3 FDI + Ui
= ≠ 0
1 > 0
2 > 0
3 > 0
43