Impact of Population Growth on Unemployment in Nigeria: Dynamic OLS Approach

Abstract

This empirical research examined the impact of population growth on unemployment in Nigeria. The study applied annual time series data from 1991 to 2017. The data on population, unemployment, consumer price index, exchange rate and foreign direct investment were tested for unit root using ADF, PP and KPSS unit root tests. The results from the ADF and PP tests revealed that all the variables were stationary at first difference except CPI that is stationary at level. While the KPSS units root test result shows that all the variables are stationary at level. The variables were co-integrated as shown by the Johansen Juselius test for co-integration. The Dynamic Ordinary Least Squares (DOLS) were used in the process of estimating the model. The main results disclosed that population and exchange rate impacted positively with unemployment. Whereas consumer price index, GDP per capita and foreign direct investment impacted negatively thereby reducing the rate of unemployment in the long-run. Government should focus more on attracting foreign direct investment, increasing GDP per capita and the desired rate of consumer price index in order to control the rate of unemployment in the country.

Keywords: Population Growth, Unemployment, Dynamic Ordinary Least Squares, Co-integration test, GDP per capita, Consumer Price Index, Foreign Direct Investment.

DOI: 10.7176/JESD/10-22-09

Publication date: November 30^th 2019