1.1 BACKGROUND OF THE STUDY
Unemployment is generally agreed to be symptom of macro-
economic illness which couldinVolu“bentary”“volunta.Whe is said voluntary I mean a condition where somebody chooses not to
work because they have a means of support other than employment
example is the idle rich man. On the other hand involuntary unemployment
exists when persons are willing to work at the prevailing rate of pay
but unable to find work. (Anyanwu 1995).
Balogun, ed et el (2003) also defined unemployed as the percentage of
the percentage of the labour force that is without job, but is able and
willing to work. In Nigeria however the ability and willingness to work
is not sufficient. It is necessary for the unemployment to be
registered with an employment bureau in order to be recognized as
unemployed. Yet, from an economic viewpoint,
the unregistered unemployed are part of the labour force and are,
therefore, technically unemployed. In Nigeria, unemployment data are
obtained through labour force sample surveys which ask if the respondent
has worked in the week preceding the survey. However, the international
labour organization (ILO), realizing the shortcomings of the labour
survey as it affects developing economies, such as Nigeria, with a large
informal sector, has encouraged a review of the methodology to
incorporate further disaggregation of respondent responses to bring out
the true rate of unemployment.
In order to establish the type of unemployment existing in an
economy, economists have lsiid uepomn
saoa‟srcua‟ r ylcl.
1. Frictional Unemployment occurs when people are temporarily
out of work because they are changing jobs. This is
unavoidable in an economy in which both the labour force and
the jobs on offer are continually changing.
2. Seasonal unemployment is said to occur in a situation in which
people are laid off seasonally, due to the nature of the job they do,
e.gagriculture workers in developing countries may be laid off during
the growing season.
3. Structural unemployment is the unemployment that exists when an
economy is in full employment. Structural unemployment occurs where
employment in one or more declining industries is falling.
It is as result of movement in the natural employment rate itself,
which can result from changes in labour market institutions, demographic
shifts etc. this situation is brought about by economic variables, such
as the level of aggregate demand and the actual and/or expected real
4. Cyclical unemployment occurs as result of fluctuations around
the natural employment rate, which can be attributed to changes in
Industrial relations refer to the process of conflict resolution,
such as collective bargaining, between employers and employees in the
course of fulfilling an employment contact. It could be achieved either
by conquest (when one party overwhelms the other), or by mutual consent.
The latter, preferred outcome is likely to result from collective
bargaining. Continuous industrial harmony is, therefore, often the
result of positive industrial relations.
In Nigeria, unemployment is regarded as one of the most challenging
economics problem facing the federal government. Although, there are
variations in the measurement of unemployment, official estimates show
their results as follows: from 1985-2003, the data shows a highly
fluctuation trend from
both the urban and rural sectors of the economy. From the data, the
1985 figure shows the percentage of the national urban and rural
unemployment as follows: national 6.10%, urban 9.8%m rural 5.2%and in
year figure is as follows: national 3% urban 3.8% rural 2.7 %( CBN
The rising rate of the population of the country which is faster than
the job opportunities, a situation in which birth rate is rising, death
rate falling and the population growth rate is between 2.5% and 3%
unemployment is bound to exist. There had been also a total neglect of
the agricultural sectors and consequent mass exodus of able bodied
youths from the rural to urban areas in search of the none existing
while cooler jobs.
This further reduces employment in agriculture and puts pressure on existing urban jobs (Anyanwu 1995)
1.2 STATEMENT OF THE PROBLEM
Unemployment has reached a very alarming proportion in Nigeria, with a
greater number of the unemployment being primary and secondary school
learners and university graduates. This situation has recently been
compounded by the increasing unemployment of professionals such as
bankers, engineers and doctors. The toll is within the productive
segment of the Nigeria population (Vision 2010).
The extent of unemployment in Nigeria in is not justified by the
available financial statistics phenomenon. This is because of the nature
of unemployment in the country where many job seekers do not see the
need for registration as unemployed due to expression of futility in
such exercise. This harnesses the sharp disparity between the official
statistics on the phenomenon and the reality on ground (Bello 2003).
Disguised unemployment otherwise known as concealed
unemployment is a situation in which more people are available for
work than is shown in the unemployment statistics (Bannock et el 1998)
The problem of disguised unemployment is quite acute in Nigeria. This
explains why official unemployment statistics sharply differs from the
true state of employed or unofficial statistic available. The recorded
figure unemployment significantly understates the number of people who
are actually willing to work at the existing set of wage rate.
Consequently, the unemployment figure in Nigeria is obtained through
labour force sample survey, by asking if the person has worked in the
past week preceding the survey.
Obviously, because even a graduate whohawks around respond yes to the question, the unemployment rate will always be very low.
Unemployment is a situation of a labour not having enough paid work
or not doing work that makes full use of his skills and ability. It can
be measured by the numbers of hours worked per week.
Generally in Nigeria, the official period of working time per week is
forty hours which manyworkers fall short of due to non – availability
of work. In some instance available work is rationed especially among
the low skilled and casual labours in the formal sector tends to be
worse (Bello 2003) therefore the major problem we have in Nigeria is the
distinguished unemployment form. The official figures of the rate of
December1998, a total of 66.3% of male and 62.0% of female
unemployment were recorded at the urban centres while rural centreshad
an estimate of 47.1% and 45%male and female job seekers respectively. As
at December 1999, school levers
unemployment rate had raised to 67.0% for males and 68.8% for females
in the urban centres while the rural centres was as high as 59.1 and
55.7%. For male and female respectively (Bello 2003).For polytechnic and
university graduates, the figures shows relatively low unemployment
rate as compared to the school leavers experience. For instance, during
the period under investigation a peak of 14.0% rate of unemployment was
recorded for polytechnic female graduate in 1998 which the male graduate
records had its peak in 1999 with 15.0% point in urban areas (Bello
2003). The graduate unemployment rate in the urban centres had 8.5 per
cent record high in September 1999 for males and 4.5%in June 1999for
female during the periods (Bello 2003).
Many people are frustrated by lack of unemployment opportunities they include these without work and those who have
jobs but want to work longer hours or more intensively. A
considerable size of utilized and underutilized labour abounds in
Nigeria and which ought to be brought into the circle. These shows that
iei‟employment problem has become chronic and should be a matter of
utmost national concern.
1.3 RESEARCH QUESTION
From the above discussions the research question is:
Has unemployment had any impact on Nigeria economy?
1.4 OBJECTIVE OF THE STUDY
The objectives that will guide this study are as follows;
1. To determine the relationship between unemployment and economic growth in Nigeria.
2. To ascertain the magnitude of this relationship.
3. To make policy recommendations based on the finding.
1.5 STATEMENT OF HYPOTHESIS
The hypothesis that would guide this work is as follows;
1. H0: Unemployment has no significant impact on economic growth in Nigeria.
2. H1: Unemployment has no significant impact on the economic growth in Nigeria.
1.6 IMPORTANCE OF THE STUDY
One of the macroeconomics goals of any country is the actualization
of full employment. Therefore, unemployment in any system is seen as a
policy failure and there is always concerted effort on the part of the
government in checkmating the impact of unemployment in an economy. The
study of unemployment is important to the policy makers, politicians,
and student of economics.
To the policy makers ascertaining the rate of unemployment, in an
economy to the desired height, the policy maker with the knowledge of
the state of unemployment in the system stands the best chance of
controlling it through appropriate initiative like poverty eradication
programmes and creation of employment opportunities that touches the
lives of the population.
1.7 SCOPE AND LIMITATION OF THE STUDY
The limitation of this research were much and varying.