Unemployment Rate, Gender Inequality and Economic Growth in Nigeria “A Short-Run Impact Analysis”

Abstract

This paper examines the short-run impact of gender inequality (proxy by primary and secondary school enrollment) and economic growth (real gross domestic product) on unemployment rate in Nigeria, and also the study determines how much of the forecast error variance of unemployment can be explained by exogenous shocks from variables (gender inequality, economic growth, and population growth rate). Thus, the study using Engel Granger Error Correction Model and Dynamic Stochastic Variance Decomposition Model on a time series data collected from Central Bank of Nigeria Statistical Bulletin. The error correction results in both model 1 and model 2 are robust and consistent with their signs; the impact of gender inequality is positive in both short run models, but significant only in model 1 before the control variables were introduced. Again, the variance decomposition result indicates that gender Inequality emits the highest impulse on the rate of unemployment at 34.735% on average of the ten periods. While economic growth has a negative impact on the rate of unemployment for the two models and exerted only 8.438% impulse on average. The variance decomposition results also showed that unemployment rate transmitted on average of 78.453% impulse on itself for the 10periods under review. Exchange rate, inflation rate, and gross capital formation emitted 28.68%, 10.78%, and 6.81% respectively on average on unemployment rate. Finally, population growth rate transmitted 5.59% impulse on unemployment. There is a long run relationship between the variables and the speed of adjustment towards equilibrium is 52%.  Thus, we conclude that gender inequality is a strong factor of unemployment and policy makers and government should embark on developing laws that will reduce/eradicate gender disparity in Nigeria.

Keywords: Error Correction Model, Gender Inequality, Unemployment, Variance Decomposition, economic growth


Article Review Status: Published

Pages: 12-41 (Download PDF)

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