The Effect Of Economic Growth On Employment Economics Essay

Nigeria is an economic system characterized by several policies which are aimed at rectifying inauspicious conditions restricting its growing and perchance its endurance as a state. Some of these policies nevertheless lack good formation, execution and monitoring. This is apparent even in current policies of power transmutation, foreign direct investing encouragement and other yesteryear programs and programmes of the authorities.

Simple economic sciences explains that there are certain macroeconomic aims that every economic system should seek to accomplish. These include full employment, monetary value stableness, balance of payment equilibrium and economic growing. Economies of the universe nevertheless rank these aims prior to themselves, depending on the degree of development of such economic system.

For illustration, it is apparent that the Central Bank of Nigeria had in clip past invested its policy steps on stabilising the monetary value degree. This to a big extent is described has one of the agencies by which growing can be increased and unemployment reduced. In other words, the end of increasing the degree of employment among other macroeconomic aims is an of import one in many developing states where unemployment and underutilization of resources has led to lifting rate of poorness.

Given that there are several visions and uninterrupted constitution of bureaus and parastatals within the Nigerian economic system more than other states of the universe, the accomplishment of impressive growing and acceptable employment degree remains in chance. High rate of unemployment, unimpressive growing rates and poorness among other wretchednesss of the public, are the order of the twenty-four hours.

Facts gotten from publications for the Nigerian economic system as analyzed by Adebayo and Ogunrinola, 2006 and the National Bureau of Statistics 2010 ( NBS ) , shows a high rate of unemployment and underemployment, for case, the rate of unemployment was 12 % in March 2005 ; it rose to 19.7 % in March 2009 while the rate of underemployment was about 19 % in 1998.

This rate of unemployment can be considered high based on the overall public presentation of the Nigerian economic system as at that clip. As a affair of accent, among the young persons in the 15-24 age brackets, the rate of unemployment was observed to be over 40 % harmonizing to the 2010 edition of the Labour Force Sample Survey of the National Bureau of Statistics.

It is of import to observe that the survey of employment and economic growing can non be separated from their several determiners. As explained in 2001 by Fofana N. F. in his work, “ Employment and Economic Growth in the Cote d’Ivoire: An Analysis of Structural Determinants ” , the issue of existent end product and employment growing in developing states is a demand for poorness decrease and a more just income distribution. This means that other economic indices are tied to the rudimentss of employment and factors impacting it.

In the visible radiation of the above therefore, Adebayo and Ogunrinola, 2006 ; Oladeji, 1994 ; Omotor and Gbosi 2006 explained that many surveies on Nigeria ‘s employment state of affairs have been devoted to unemployment and its determiners and/or its impacts on economic growing. These surveies largely conclude on the nature of employment and may besides propose grounds and solutions to the expletive of unemployment.

Oni, 2006 ; Patterson et Al 2006 besides opined that “ Though from a speedy expression at the Nigerian information on employment degree and existent GDP, it appears that the recent economic growing tendencies and forms have been deficient to do any appreciable impact on employment coevals and poorness decrease, but this has non been sufficiently investigated through empirical observation in the literature ” .

It is therefore needed to happen out flatly the causal consequence between employment and economic growing based on available informations collected by assorted informations assemblage constitutions.

STATEMENT OF RESEARCH PROBLEM

The major job identified in the Nigerian context is that of these additions in these economic growing indexs, unemployment has truly been a major cause for concern. Policies and policy mark to control unemployment have truly non been working and assorted labour market Torahs and policy have non truly worked.

In macroeconomics analysis growing has been described to hold positive relationship with the degree of employment. Harmonizing to assorted economic rules this has been proven. Of such rule is the okun ‘s jurisprudence which states that has the economic system grows by state 3 % , the rate of unemployment is to cut down by 1 % and frailty versa. But the contrary has been the instance in the Nigerian context. The economic system in recent times has been sing growing but the degree of unemployment has been increasing both among the young person and among working category grownups.

The assorted theoretical literatures read shows that the link between the employment rate and the degree of growing as stated in the paragraph above is a positive one, beliing the Okun ‘s jurisprudence. This declared fact is shown by the recent figures on both employment and economic growing. The rates of economic growing for 2010 to 1st one-fourth 2013 are as follows: 7.76 % to 6.99 % severally and those of unemployment from 2010 to 2012 are as follows: 19.7 % to 23.9 severally ( Beginning: www.tradingeconomics.com/ Nigeria Bureau of Statistics ) .

These growing figures shown supra state us about the interruption from the norm that the Nigerian economic system is go throughing through. But in a normal economic system the increased degree of growing is supposed to hike the degree of income, degree of investing, degree of ingestion and nest eggs and finally the degree of employment. But the contrary has been the instance in the Nigerian context: the employment coevals rate supports falling, the unemployment rate supports lifting and the growing rate has to some extent increased systematically with minimum fluctuations.

The job that this research wishes to cover with has to make in inside informations with the nature and kineticss of this growing ; what has influenced it overtime? Why has it that this increased growing has had no important consequence on the rate of employment coevals? And eventually how these additions in growing can be exploited to acquire maximal growing in employment coevals rate.

1.3 RESEARCH Question

Therefore, given the above jobs, the research inquiries are ;

What are the major relationships between employment coevals and economic growing?

What are the effects of economic growing rates on employment coevals and how broad is the spread between the two economic aims?

How is this spread traveling to be reduced?

Which is the best macroeconomic theoretical account and scheme to follow to control unemployment Nigeria?

Research OBJECTIVES

The general aim of the survey is to through empirical observation look into whether employment additions or unemployment lessenings with increasing economic growing rate.

The specific aims of the survey are:

To pattern the rate of economic growing in Nigeria with regard to its consequence on employment rates and policy.

To analyze the function of assorted policy governments in breaking the economic growing and besides policies to increase the rate employment in the economic system.

To reexamine the assorted types of employment and the employment schemes with regard to assorted occupation types and how it has affected growing.

To demo assorted tendencies in the information of both economic growing and unemployment, expression at the assorted spread analysis and so pattern ways of cut downing the spreads identified between economic growing and employment.

To supply policy recommendation ( s )

Research HYPOTHESES

The research aims at proving the undermentioned hypotheses:

Hypothesis 1

Holmium: I±i=0 There is no relationship between economic growing and employment rates.

Hour angle: I±i a‰ 0 There is a relationship between economic growing and employment rates.

Hypothesis 2

Holmium: I±i=0 There is no important consequence of economic growing on employment.

Hour angle: I±i a‰ 0 There is important consequence of economic growing on employment.

1.6 JUSTIFICATION OF THE STUDY

Many happenings about the fluctuations between the economic growing rate and the increasing degree of unemployment as influenced research workers in recent times to analyze the great influence of the growing rate on the degree of employment in the Nigeria economic system. Due to the fact that the Nigerian economic system is going progressively sophisticated hence the demand to analyze the relationships between this two constructs since it has been stated in assorted literature that both economic index has really high influence on other economic variables like the exchange rates stableness, monetary value stableness etc. Therefore, from the assorted surveies carried out in the several literatures, it has shown that there has been considerable addition in the Nigeria economic growing rate but a high rate of unemployment. But in recent times at that place have been steps to control the rate of unemployment in the economic system.

This research will first of all assist policy shapers in understanding the consequence and impact of policies made for controling the unemployment rate on the economic system has a whole.

Second, this research work on completion could help pupils of related subject in their class of survey.

Besides, farther research workers and the general populace would profit from this research work in their class of research and probe by throwing more visible radiation on the function which the economic growing dramas in altering the degree at which people get occupations.

1.6 SCOPE OF THE STUDY

This research work is gaining controls why, how and through what channels does economic growing impact on employment rates and besides the function of authorities in making policies to increase the employment from 1990 to 2013 and besides programmes laid down to work out the job of unemployment.

Brief historical background of the economic system will besides be traced from the 90s in order to do a concise and comprehensive analysis of the part of the economic growing to employment.

ORGANIZATION OF CHAPTERS

This undertaking is divided into five chapters. The first chapter gives a general debut of the survey, the statement of the research job, aim ( s ) of the survey, research hypothesis, and the justification of the survey. Chapter two is the reappraisal of related constructs ; theoretical and empirical literature, while chapter three presents the research methodological analysis. Chapter four is presentation of informations, reading and analysis of consequence. Finally, chapter five nowadayss the drumhead, decision and recommendation. Other assorted inside informations are presented in the appendix.

Chapter TWO

LITERATURE REVIEW

2.1 Conceptual Literature:

2.1.1 ECONOMIC GROWTH

This is an addition in the entire sum of production and wealth in an economic system. However, harmonizing to Investopedia, economic growing is an addition in the capacity of an economic system to bring forth goods and services, compared from one period of clip to another. It can be measured in nominal footings which include rising prices, or in existent footings, which are adjusted for rising prices.

Besides economic growing was defined in Wikipedia as the addition in the sum of the goods and services produced by economic system overtime. Economic growing can be referred to as the growing in Gross Domestic Product ( GDP ) which is defined as the sum of goods and service purchased in an accounting within a peculiar geographical location. And this growing is in existent footings.

Harmonizing to Romer in the concise encyclopaedia of economic sciences, economic growing is what occurs whenever people take resources and rearrange them in ways that make them more valuable.

2.1.2 POTENTIAL OUTPUT

Potential growing is the per centum addition in the capacity of the economic system to bring forth. This occurs yearly ( Sloman, 6th erectile dysfunction. 2006 ) . Besides possible growing