NON PARAMETRIC ANALYSIS OF THE RATE OF UNEMPLOYMENT IN NIGERIA

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ABSTRACT

This study examined the rate of unemployment in Nigeria. The data used was a secondary data collected from Nigeria Bureau of Statistics (NBS) on forty one   observations. The research studied the effect of some factors on unemployment rate in Nigeria, the factors includes gross domestic product, government expenditure and population growth. Chi square analysis was use to ascertain the relationship between the various factors. The analysis shows that unemployment rate depends on gross domestic product. Based on the outcome of the research, it was recommended that the government should try to create policy that will enhance job creation in the country and also give grants and loans to entrepreneurs that seeks to start their own business.

CHAPTER ONE

INTRODUCTION

1.0    BACKGROUND TO THE STUDY

Unemployment is generally agreed to be symptom of macro-economic illness which could be “voluntary” or “in voluntary”. When is said voluntary I mean a condition where somebody chooses not to work because they have a means of support other than employment example is the idle rich man. On the other hand involuntary unemployment exists when persons who are willing to work at the prevailing rate of pay but unable to find work. (Anyanwu 1995).

Balogun, (2003) also defined unemployment as the percentage of thelabour force that is without job, but is able and willing to work. In Nigeria however the ability and willingness to work is not sufficient. It is necessary for the unemployed to be registered with an employment bureau in order to be recognized as unemployed. Yet, from an economic viewpoint, the unregistered unemployed are part of the labour force and are, therefore, technically unemployed. In Nigeria, unemployment data are obtained through labour force sample surveys which ask if the respondent has worked in the week preceding the survey. However, the international labour organization (ILO), realizing the shortcomings of the labour survey as it affects developing economies, such as Nigeria, with a large informal sector, has encouraged a review of the methodology to incorporate further disaggregation of respondent responses to bring out the true rate of unemployment.

In order to establish the type of unemployment existing in an economy, economists have classified unemployment as frictional, seasonal structural or cyclical.

1. Frictional Unemployment occurs when people are temporarily out of work because they are changing jobs. This isunavoidable in an economy in which both the labour force and the jobs on offer are continually changing.

2. Seasonal unemployment is said to occur in a situation in which people are laid off seasonally, due to the nature of the job they do, e.g. agriculture workers in developing countries may be laid off during the growing season.

3. Structural unemployment is the unemployment that exists when an economy is in full employment. Structural unemployment occurs where employment in one or more declining industries is falling.

It is as result of movement in the natural employment rate itself, which can result from changes in labour market institutions, demographic shifts etc. this situation is brought about by economic variables, such as the level of aggregate demand and the actual and/or expected real wage rate.

4. Cyclical unemployment occurs as result of fluctuations around the natural employment rate, which can be attributed to changes in aggregate demand.

Industrial relations refer to the process of conflict resolution, such as collective bargaining, between employers and employees in the course of fulfilling an employment contact. It could be achieved either by conquest (when one party overwhelms the other), or by mutual consent. The latter, preferred outcome is likely to result from collective bargaining. Continuous industrial harmony is, therefore, often the result of positive industrial relations.

In Nigeria, unemployment is regarded as one of the most challenging economics problem facing the federal government. Although, there are variations in the measurement of unemployment, official estimates show their results as follows: from 1985-2003, the data shows a highly fluctuation trend from both the urban and rural sectors of the economy. From the data, the 1985 figure shows the percentage of the national urban and rural unemployment as follows: national 6.10%, urban 9.8% rural 5.2%and in year figure is as follows: national 3% urban 3.8% rural 2.7 %( CBN 2004).

The rising rate of the population of the country which is faster than the job opportunities, a situation in which birth rate is rising, death rate falling and the population growth rate is between 2.5% and 3% unemployment is bound to exist. There had been also a total neglect of the agricultural sectors and other sectors that could have reduce the rate of unemployment in the country and consequent mass exodus of able bodied youths from the rural to urban areas in search of the non-existing white cooler jobs.

This further reduces employment in agriculture and puts pressure on existing urban jobs (Anyanwu 1995).

1.1 STATEMENT OF THE PROBLEM

Unemployment has reached a very alarming proportion in Nigeria, with a greater number of the unemployment being primary and secondary school leavers and university graduates. This situation has recently been compounded by the increasing unemployment of professionals such as bankers, engineers and doctors and other professions both skilled and unskilled persons.  The toll is within the productive segment of the Nigeria population (Vision 2010).

The extent of unemployment in Nigeria is not justified by the available financial statistics phenomenon. This is because of the nature of unemployment in the country where many job seekers do not see the need for registration as unemployed persons necessary due to expression of futility in such exercise. This harnesses the sharp disparity between the official statistics on the phenomenon and the reality on ground (Bello 2003). Disguised unemployment otherwise known as concealedunemployment is a situation in which more people are available for work than is shown in the unemployment statistics (Bannock et el 1998).

The problem of disguised unemployment is quite acute in Nigeria. This explains why official unemployment statistics sharply differs from the true state of employed or unofficial statistic available. The recorded figure unemployment significantly understates the number of people who are actually willing to work at the existing set of wage rate. Consequently, the unemployment figure in Nigeria is obtained through labour force sample survey, by asking if the person has worked in the past week preceding the survey.

Obviously, because even a graduate whohawks around respond yes to the question, the unemployment rate will always be very low.

Unemployment is a situation of a labourforce not having enough paid work or not doing work that makes full use of his skills and ability. It can be measured by the numbers of hours worked per week.

Generally in Nigeria, the official period of working time per week is forty hours which many workers fall short of due to non–availability of work. In some instance available work is rationed especially among the low skilled and casual labourers in the formal sector tends to be worse (Bello 2003) therefore the major problem we have in Nigeria is the distinguished unemployment form. The official figures of the rate of unemployment from December1998, a total of 66.3% of male and 62.0% of female unemployment were recorded at the urban centres while rural centres had an estimate of 47.1% and 45%male and female job seekers respectively. As at December 1999, school leavers’unemployment rate had raised to 67.0% for males and 68.8% for females in the urban centres while the rural centres was as high as 59.1 and 55.7%. For male and female respectively (Bello 2003).For polytechnic and university graduates, the figures shows relatively low unemployment rate as compared to the school leavers experience. For instance, during the period under investigation a peak of 14.0% rate of unemployment was recorded for polytechnic female graduate in 1998 while the male graduate records had its peak in 1999 with 15.0% point in urban areas (Bello 2003). The graduate unemployment rate in the urban centres had 8.5 per cent record high in September 1999 for males and 4.5%in June 1999for female during the periods (Bello 2003).

Many people are frustrated by lack of employments opportunities they include those without work and those who have jobs but want to work longer hours or more intensively. A considerable size of utilized and underutilized labour abounds in Nigeria and which ought to be brought into the circle. These shows that Nigeria’s unemployment problem has become chronic and should be a matter of utmost national concern.

NON PARAMETRIC ANALYSIS OF THE RATE OF UNEMPLOYMENT IN NIGERIA