Persistence of Unemployment in Nigeria: The Role of Output Growth and Population

In spite of the consistent growth in GDP in Nigeria over the past two decades, and given the fact that the country is the richest in Africa in terms of its natural resources and the second richest in terms of GDP, the country still battles with chronic unemployment. This study investigates both descriptively and empirically the role of GDP and population in determining the level of unemployment in Nigeria between 1970 and 2010. The variables employed in the study are GDP, inflation, labor force, employment and public debt to GDP ratio. Employing an error correction model, the study finds that output growth in Nigeria did not have as high an influence on unemployment growth as labor force growth had on it. Considering the high adjustment rate of unemployment disequilibrium (72% per year), this study shows that unemployment in Nigeria adjusts fast and has a consistent path.