An econometric examination of growth, unemployment and poverty in Nigeria

Abstract

The concept of growth is used in all spheres of human endeavour. In economics, it refers to a country’s long term rise in capacity to supply increasingly diverse economic goods to its population based on advancing technology and the institutional and ideological adjustments that it demands. It entails an increase in the volume of output in a given current year compared to the output in a given previous year. Unemployment, on the other hand, refers to a state of joblessness or an involuntary idleness of a person willing to work at the prevailing rate of pay but unable to find it while poverty is generally conceptualized as lack of adequate resources to obtain and consume a certain bundle of goods and services. This work on an econometric examination of growth, unemployment and poverty in Nigeria is undertaken with a view to finding out the relationship between these three variables and making some useful recommendations for poverty alleviation. The study used a time series data for 30 years (1980-2010), a period which witnessed a lot of policy changes in Nigeria. The data were secondarily sourced from World Bank Publication, IMF and UN Publications, CBN and Federal Office of Statistics Communication as well as other relevant communications. A three stage least square (35LS) estimate was used for the analysis and the results showed among others that poverty is negatively related to growth and agricultural production but positively related to unemployment rate, influence rate, manufacturing and petroleum production. Economic growth is also found to be negatively related to poverty index and unemployment is positively related to poverty index and growth. The work therefore recommends the setting out of an appropriate macroeconomic policies that will significantly reduce the high level of income inequality which is crucial for poverty alleviation, people oriented growth policies and human capital development among others.

Key Words: Economic Examination, Unemployment, Growth, Poverty, Macroeconomic Policies, Multi-Equation Model.