UNEMPLOYMENT AND ECONOMIC GROWTH IN NIGERIA: DOES OKUN’S LAW MATTERS?
Keywords:
Economic Growth, Okun’s law, population, unemployment, error correction model
Abstract
The situation in Nigeria is rapid population growth with high level of unemployment rate. The theoretical proposition of the Okun’s law suggests an indirect relationship existing between unemployment and output growth. This study tests the validity of Okun’s law by examining the impact of youth employment generation on sustainable growth in the Nigerian economy. We modeled real gross domestic product against unemployment rate, population growth, labour and government expenditure between 1986 and 2017. The empirical findings show that there is short- and long- run relationship existing between unemployment rate, population growth and output growth in Nigeria. Hence, study recommends that the activities by the government in promoting economic growth in the country should be geared towards promoting employment for the people in other sector.
References
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Loizidies, J., & Vamvoukas, G. (2005). Government Expenditure and Economic Growth: Evidence from Trivariate Causality Testing, Journal of Applied Econometrics 8: 125. [in English].
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Njoku, A., & O. Ihugba (2011). Unemployment and Nigerian Economic Growth (1985-2009). Proceeding of the 2011 International Conference on Teaching, Learning and Change. International Association for Teaching and Learning (IATEL). [in English].
Obadan, M., & Odusola, F. (2010). Productivity and Unemployment. Ibadan: National Center for Economics Management and Administration. [in English].
Okun, A. (1962). Potential GNP: Its Measurement and Significance, Cowles Foundation Paper, 190, 1–7. [in English].
Oluyomi, A., & Ogunrinola, O. (2011). Employment and Economic Growth Nexus in Nigeria, International Journal of Business and Social Sciences, 2 (11), 12-17. [in English].
Walterskirchen, E. (1999). The Relationship between Growth, Employment and Unemployment in the EU European Economists for an Alternative Economic Policy (TSERNETWORK). Workshop in Barcelona, 16 to 18 September. [in English].
Warner, A. M. (1995). Natural Resource Abundance and Economic Growth. NBER Working Paper No: 5398. [in English].
Bloom, D. (1986). Economic Development and the Timing and Components of Population Growth. Journal of Policy Modeling, 10: 57-81. [in English].
Christopoulos, D. (2004). The Relationship between Output and Unemployment: Evidence from Greek Regions Study, Regional Science, 83: 611-620. [in English].
Daniel, K., & Ejara, D. (2009). Impact of Information Asymmetry on Municipal Bond Yields: An Empirical Analysis. Am. J. Econ. Bus. Admin, 1: 11-20. [in English].
Dao, M. (2012). Population and Economic Growth in Developing Countries. International Journal of Academic Research in Business and Social Sciences, 2 (1), 6-17. [in English].
Ehrlich, P. (1968).Population Control or Race Oblivion? The Population Bomb. New York: Ballantine Books. [in English].
Engel, R., & Granger, W. (1987). Cointegration and Error Correction: Re-presentation, Estimation and Testing. Econometrica, 55(2), 251–276. [in English].
Hoover, E. (1958) Population Growth and Economic Development in Low Income Countries. Princeton, New Jersey, Princeton University Press. [in English].
Johansen, S. (1988). Statistical Analysis of Cointegration Vectors. Journal of Economic Dynamics and Control, 12 (2-3), 231-254. [in English].
Johansen, S., & Juselius, K. (1990). Maximum Likelihood Estimation and Inference on Cointegration with Applications to the Demand for Money. Oxford Bulletin of Economics and Statistics, 52 (2), 169-210. [in English].
Kelley, A. (1988). Economic Consequence of Population Change in the Third World Countries. Journal of Economic Literature, 26(4), 685-728. [in English].
Kelley, A. (2001). The Population Debate in Historical Perspective: Revisionism revised. Oxford University Press. [in English].
Keynes, J. (1936). The General Theory of Employment, Interest and Money. London: Macmillan. [in English].
Loizidies, J., & Vamvoukas, G. (2005). Government Expenditure and Economic Growth: Evidence from Trivariate Causality Testing, Journal of Applied Econometrics 8: 125. [in English].
Maku, E. O., & Alimi, O. Y. (2018). Fiscal Policy Tools, Employment Generation and Sustainable Development in Nigeria. Acta Universitatis Danubius Economica, 14(3), 186-199. [in English].
Njoku, A., & O. Ihugba (2011). Unemployment and Nigerian Economic Growth (1985-2009). Proceeding of the 2011 International Conference on Teaching, Learning and Change. International Association for Teaching and Learning (IATEL). [in English].
Obadan, M., & Odusola, F. (2010). Productivity and Unemployment. Ibadan: National Center for Economics Management and Administration. [in English].
Okun, A. (1962). Potential GNP: Its Measurement and Significance, Cowles Foundation Paper, 190, 1–7. [in English].
Oluyomi, A., & Ogunrinola, O. (2011). Employment and Economic Growth Nexus in Nigeria, International Journal of Business and Social Sciences, 2 (11), 12-17. [in English].
Walterskirchen, E. (1999). The Relationship between Growth, Employment and Unemployment in the EU European Economists for an Alternative Economic Policy (TSERNETWORK). Workshop in Barcelona, 16 to 18 September. [in English].
Warner, A. M. (1995). Natural Resource Abundance and Economic Growth. NBER Working Paper No: 5398. [in English].
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Published
2019-04-03
How to Cite
Adedayo Adelowokan, O., & Olusegun ОkutimirenA. (2019). UNEMPLOYMENT AND ECONOMIC GROWTH IN NIGERIA: DOES OKUN’S LAW MATTERS?. Scientific Journal of Polonia University, 32(1), 26-37. https://doi.org/10.23856/3203
Section
Social Sciences
