Journal of Emerging Trends in Economics and Management Sciences: Home

Abstract:
In Nigeria, since the early eighties, urban unemployment has assumed an alarming dimension and a crisis proportion with millions of able-bodied persons who are willing to accept jobs at the prevailing wage rates are unable to find placements. Thus urban unemployment has been regarded as one of the most challenging economic problems facing the Nigerian policy makers. This study however examined the determinants of the urban unemployment in Nigeria. The choice is to enable us identify the major factor responsible for the crisis. This study however made use of time series secondary data and parsimonious error correction mechanism to test the significant relationship between the level of unemployment and demand for labour, supply of labour, population, inflation, capacity utilization, gross capital formation and nominal wage rate . Empirical investigations showed that the rising nominal wages and the accelerated growth of population which affected the supply side through a high and rapid increase in labour force relative to the absorptive capacity of the economy appear to be the main determinant of high unemployment in Nigeria. The econometric results suggested the need for the government to embark on direct measures capable of creating jobs through industrialization and mechanization of agriculture. It also recommended that programmes of integrated rural development and re-orientation of economic activity and social investments towards the rural areas need to be embarked upon to create an appropriate rural -urban economic balance.

Keywords: unemployment, labour force, rural-urban drift, population growth, wage rate

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