Implications of population growth on unemployment in Nigeria: Testing the Malthusian and Keynesian Theories

Abstract

This study was conducted to determine if it is Malthusian theory that viewed population growth as depressing employment opportunity, or Keynesian theory that supports the view of population growth enhancing employment opportunities that holds in the population and unemployment relationship in Nigeria within the period of 1981 to 2019. Data on age dependency and working–age population ratio were used to measure population growth, with unemployment rate as the explained variable. The datasets were sourced from the World Development Indicator database. The study employed the ARDL approach to cointegration to determine the long-run relationship of the variables. The results of the analysis show a long-run relationship between population and unemployment growth rate in Nigeria. Population growth was shown to be capable of significantly reducing unemployment in the long run thereby upholding the proposition of Keynesian theory of unemployment. However, the effect was shown to be the other way in the short run, thereby supporting the proposition of the Malthusian theory of population. The study therefore posits that the effect of population on unemployment is time variant. It is therefore recommended that the government of Nigeria should improve the quality of her population through education and health in order to be able to reap the gain in the future as population grows. Also, the potentialities in the growing population could be harnessed through increased aggregate demand when the government of Nigeria uses his fiscal stance to enhance the people’s income.