EFFECT OF UNEMPLOYMENT ON THE NIGERIAN ECONOMIC GROWTH FROM 1986 – 2022

ABSTRACT The study assessed the effect of unemployment on the Nigerian economic growth from 1986 – 2022 The study employs secondary data in form of time series covering the span of 36 years, obtained from the World Development Indicator’s Online Database. The dependent variable used is Economic Growth proxied by Real Gross Domestic Product (RGDP) while Unemployment Rate (UEMP), Inflation Rate (INF), Exchange Rate (EXR) and Interest Rate (INT) were used as the independent variables. The Data were analyzed using Ordinary Least Square (OLS) estimation technique, Johansen Cointegratin Test and Granger Causality Test. Findings from the OLS estimation revealed that Unemployment Rate (UEMP) has a positive and statistically significant impact on Economic Growth proxied by Real Gross Domestic Product (RGDP) at 5% level of significance. The result of the cointegration test revealed the presence of long run relationship between unemployment and economic growth in Nigeria. The result of the Granger Causality test revealed that whereas unemployment does not granger cause economic growth, on the other hand, economic growth granger causes unemployment in Nigeria at 5% level of significance, implying a unidirectional causality from unemployment to economic growth. In view of the findings, the researcher has proffered the following recommendation among others; that despite finding the rate of unemployment growing parallel to the economic growth of Nigeria, the government should not consider the economy’s growth as being indifferent to how many unemployed youths there are in the country but should take drastic measures to curtail the problem of unemployment in order to boost the economy’s growth further than it is.