Impact of Unemployment and Poverty on Economic Growth in Nigeria

Abstract

The study investigates the impact of unemployment and poverty on economic growth in Nigeria over the time period from 1980 - 2022. Unemployment rate (UNEMPR), and poverty rate (POVR) were used as independent variables while real gross domestic product (RGDP) was used as the dependent variable. Annual time series data on our targeted variables were sourced from the CBN annual statistical bulletin, World Bank development indicators. The Eview9 Statistical Software was employed to analyze the data. The Unit root test shows that UNEMPR, and RGDP are stationary after first difference I(1) while POVR was stationary at level I(0). The data were analyzed using the Autoregressive distributed lag (ARDL). The results of the ARDL estimates indicate that in both the long run and short run unemployment coefficient is negatively signed and statistically significant which implies that increase in unemployment rate would lead to a reduction in real gross domestic product (Economic growth) in Nigeria in both the short run and long run. But the coefficient of poverty is not statistically significant which implies that poverty does not meaningfully affect real gross domestic product in Nigeria. The study recommends amongst others that the government should fully engage those who are unemployed in productive activities which in turn would accelerate economic growth in Nigeria.

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