Drivers of Unemployment in Developing Economies: Evidence from Nigeria

Abstract

Unemployment is a global phenomenon whereby eligible workforce of a nation is disengaged in the service of the nation. It is not only a serious economic issue but has social implications that affect almost all countries and all people either directly or indirectly. It causes social disquiet and is the harbinger of the spate of crimes, social chaos, perennial youth unrest and unstable socio-economic structure that has bedeviled several nations. The increasing rate of unemployment has become an issue of concern for both policymakers and scholars in developing economies, while the developed ones are not excluded. This study sought to investigate the determinants of unemployment in developing economies using Nigeria as a case study. the study covers the period from 191 to 2018. Using annual time series a GLM model was estimated after examining for stationarity (using ADF and PP) and co-integration (using PQ). The result obtained indicates that raising the minimum wage is not the major cause of unemployment in Nigeria. It also shows that the CBN monetary policy stance and rural urban drift precipitate rather than reduce unemployment. It is therefore recorded supply-side solution be considered for controlling unemployment especially when the CBN policy is biased towards inflation control