Effects of Poverty and Unemployment on the Economic Growth of Nigeria

Effects of Poverty and Unemployment on the Economic Growth of Nigeria

Abstract

This study examined the effect of poverty and unemployment rate in Nigeria for the period of 34 years (1981 to 2015) using a time series data.

The study used the OLS estimation technique to examine the time series data under a multiple linear regression framework.

The study found out that poverty is negative and insignificantly related to economic growth in Nigeria for the period under study.

The study also discovered that unemployment is negative and significantly related to economic growth in Nigeria.

Finally, the study established that inflation is negative and significantly related to economic growth in Nigeria.

The study recommended that Poverty and unemployment reduction strategies should be pursued by the government to advert the diminishing effect poverty has on economic growth in Nigeria and this can done by creating job opportunities and supporting already established business to expand and employ more labor.

Introduction

Poverty and unemployment an identical bane is a global trend which affects people in various depths and levels at different times and phases of existence.

The extent of association between poverty and unemployment in developing countries is often a subject of considerable debate.

There is actually no nation that is absolutely free from poverty and unemployment. The major difference is the degree and pervasiveness of this similar blight.

Nigeria is the most populous country in Africa and the eight in the world with a population of 140million by 2006 census with a nominal GDP of $207. Billion per capita income of $140, As a result second largest economy in Africa salami 2002.

A high level of unemployment and underemployment is one of the critical socio-economic problems facing Nigeria. While the labor force with an increasing proportion of youth employment opportunities is inadequate to absorb labor market entrants. As a result, youths are especially affected by unemployment.

Moreover, young people are more likely to be employed in jobs of low quality. Underemployed working long hours for low wages, engaged in dangerous work or receive only short term and or informal employment arrangements.

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