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The Rate Of Unemployment In Nigeria Economics Essay

According to streetdirectory online unemployment refers to when they is joblessness in an economy .Furthermore it describe unemployment as a state of not having a paying job. The rate of measuring unemployment is called unemployment rate which is the sum of unemployed workers divided by the sum of civilians in a country. Despite the fact that unemployment found in the rural area is an example of disguised unemployment, it is not considered as big problem.

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According to politics(2012)[online]defined unemployment as one of the factors used an economy to determine the number of individuals that has offer themselves for work but are where not able to a paying job.It went further to say that individuals that has not offer themselves for unemployment are not counted among the unemployment economic figure in an economy. Furthermore it says high level of unemployment is been caused by a struggling economy.

According to investorswords (2012) [online] defined unemployment a situation in the economy of a nation, in which individuals looking for job remain unrmployed. According to word IQ(2010)[online] defined unemployment according to economics definition as an individual that is capable to work and has offered himself for employment but not able to find a job. Furthermore it defined unemployment as the number of individuals employed divided by the total labor force.

According to about(2012)[online] unemployment is defined as individuals without jobs. It further says that unemployment is determined by unemployment rate. Which is the sum of unemployed individuals divided by the total civilian labor force. It went further to say that unemployment is not is not taking into consideration as a serious problem in spite of the disguised unemployment present in the rural area.

The history of unemployment can be traced in different countries like in Britain. The rate of unemployment which is the total number of individual divided by the total labor force of a country was at a very minimum level because of the stable econmy the britian enjoyed in 1900-1914. After some period of low level of unemployment the britian began to experience an increase in unemployment in 1920s because formally the unemployment level was between 10% and 12%. The level of unemployment fell to a great level in In 1920s where the unemployment level was increased which was as a result of the closing down of some industries due to the fact that they were not able to compete with other foreign countries, britian experienced a larger decline in their economy in 1930 However in 1920s the unemployment level began to rise.In 1933,1934 and 1935 and it became constant at January 1936 , which was about 13.90%. In 1938 the level of unemployment was recorded to be 10%. After the second world, new industries began to open and this resulted to a decrease in unemployment level, this decrease in the level of unemployment was experienced in 1940s to 1960s. But in the mid 1970s the unemployment level began to increase. (2012)[online]

In 1980-1982, the unemployment level in Britain grew worse.it reach its maximum in 1986 and fell in 1990.Unfortunately there was another increase in unemployment in 1990 which later fell in 1993 and it continue to fall till the end of century. But in 2009 the unemployment level rose again in which the unemployment rate in the United Kingdom in September 2012 was recorded to be 7.9%. from local history(2012)[online]

In USA, during the period of 1930s in USA, they experience a high level of unemployment the level of unemployment was very high during 1930s and a fall in the price of goods which started in From mid-September. On 24th October 1929 they was a teribble fall in price of goods which resulted into deterioration of commercial operation and the rate at which their industries produces goods fell completely because of the fall in the price of the goods that was produced which resulted in the reduction of their exportation to other. This made aabout 25% of the work force not to be able to get a job and therefore they remained unemployed. From local history (2012) [online]

Due to the high level of unemployment it has lead in fall in the economy of USA which was very serious than any economic fall they went through before. It was recognize as the depression.

At that time the president there had was President Hoover who tried to convince employers to maintain wages at their present level and tried to help by increasing government spending on the construction of bridges, roads and public buildings. But president Hoover rejected the introduction of federal unemployment relief inother to prevent people from over independence on the state.From local history (2012)[online]

For the unemployed life during the depression was very harsh. Many were reduced to attending soup kitchens run by charities. (The soup was sometimes called ‘Hoover stew’. Destitute people lived in shantytowns they called Hoovervilles. Hoover became deeply unpopular and in 1932 Franklin Delano Roosevelt was elected President. From Local history (2012)[online]

Roosevelt assured the American people that the only thing they had to fear was fear itself. He promised the American people ‘A New Deal’. However between 1933 and 1939 he had only limited success. Unemployment fell to between 14% and 15% by 1937. However in that year the economy dipped again. (It was called the recession) and unemployment rose to 17%. However industrial production rose to its 1929 level again by 1939. From local history(2012)[online]

On 12 May 1933 the Federal Emergency Relief Act was passed to help the unemployed. The states were given grants to provide work like repairing roads and improving parks and schools. From local history(2012)[online]

Also in 1933 Roosevelt founded the civilian Conservation Corps, which employed young men on conservation projects. A Public Works Administration was created which built public buildings, bridges and dams. Also the Tennessee Valley Authority was created to build dams and hydroelectric plants. From local history(2012)[online]

In 1935 the Social Security Act created old age pensions and an unemployment insurance scheme. In 1938 a Fair Labor Standards Act created a minimum wage.

Despite all of Roosevelt’s efforts the depression only ended with the coming of war. The USA mobilized all its resources for war. Industrial output doubled during World War II and by 1943 there was full employment. From local history(2012)[online]

Meanwhile Canada suffered from a huge drop in exports of timber, grain and fish. By 1933 unemployment had soared to 23%. The government introduced relief works but economic hardship continued throughout the 1930s. The depression only ended when the Second World War began in 1939. Gotten from Local histories (2012)[online].

In Nigeria, in 1985 the national unemployment rate estimated by the office of statistics was 4.3 percent of the labor force. The unemployment rate increased to 5.3 percent in 1986and 7.0 percent in 1987, before falling to 5.1 percent in 1988. This was as a result of measures taken under the SAP. Most of the unemployed were city dwellers as indicated by the urban jobless rates of 8.7 percent in 1985, 9.1 percent in 1986, and 9.8 percent in 1987and 7.3 percent in 1988. But the rural unemployment figure were less accurate than those of the urban unemployment figure because of the disguised unemployment found in the rural areas were most of them were underemployed.

Secondary school graduate has the highest proportion of unemployed which was about 30 to 50 percent. There were also about 40 percent unemployment rate among urban youth aged 20 to 24 and 31 percent rate among those aged 15 to 19. Gotten from photius(2004)[online].

According to ehow(2012)[online] The are four main types of unemployment. Which are structural unemployment, frictional unemployment, cyclical unemployment and seasonal unemployment? Cyclical unemployment is the type of unemployment that causes widespread unemployment within a population. Seasonal and frictional unemployment are forms of unemployment that are voluntary which change depending on what type of year it is. Structural unemployment has to do with the supply and the demand of the number of individuals trained to perform a particular job.

There are four types of unemployment which are cyclical unemployment; this is the type of unemployment that causes widespread unemployment within a population, seasonal unemployment, frictional unemployment, and structural unemployment. Furthermore frictional unemployment is the type of unemployment that occurs, when an individual finding a job takes time or when an individual is waiting to find a job that works for him or taking time to choose between a multiple jobs offers. Frictional unemployment is an involuntary unemployment because an individual has to decide for example when an individual voluntary quit a job which may be due to as a result inability of salary increment, the time it takes for the individual to find a new job is called frictional unemployment, because when the individual is looking for another job the individual is partially unemployed. The second type of unemployment is called structural unemployment is the structural unemployment which is caused as a result of a change in the technique of production.it can also be caused when the needs of the employers does not match the skills that a workforce in a country has. Structural unemployment can also be caused by geographical problems. The third type of unemployment is called the seasonal unemployment which occurs when an individual is unemployed because certain types of job are only available at a certain times or season of the year. For example a gardener will remain unemployed until the flowers in a garden grow. Lastly the fourth types of unemployment are called the cyclical unemployment which is caused as a result of decline in the economy of a nation. It is the type of unemployment talked frequently in news. It is caused as a result of when the economic growth in a country is poor in which there is not enough demand to supply goods. Gotten from ehow(2012)[online]

According to buzzle (2012)[online]a series of events in the United States had sparked a vicious recessionary cycle which is commonly referred to as the economic recession of 2007 or financial crisis of 2007. The Bureau of Labor Statics, United States, churns out numbers according to the current population census with the rate of unemployment at about 9% in the June of 2010. Economists have predicted this exorbitant rate of unemployment to rise from the beginning of 2011. Though the causes of unemployment have been closely associated with the financial crisis and recession, there are several other factors that have contributed to the same.

some of the causes of unemployment in united states of America are

Financial Crisis of 2007 to 2009

United States President once commented in very harsh words that unemployment and economic crisis was as a result of ‘culture of irresponsibility’. What President Obama implied was the current status of the United States economy. Let us go down to the basics of Alfred Marshall and Adam Smith. An economy with a good GDP is a result of legitimate demand and supply curves, meaning that producers produce and consumers pay for the goods. The total goods that are purchased in the economy is the GDP. However, in the United States, an enormous volume of goods are purchased by credit cards (i.e. money which will be paid at a later date). In May 2010, G.19 report on consumer credit, the Federal Reserve indicated that as of March, $2.45 trillion worth of consumer debt had accumulated, with a circulation of 576.4 million credit cards. This enormous number of ‘credit’ has generated a GDP that is partially ‘artificial’. This unhealthy purchase rate has led to an enormous volume of bad debt and bankruptcy with lenders, credit card companies and consumers suffering losses. This loss bearing spread to all economic entities in the US economy with an enormous number of companies either filing for bankruptcy, or initiating layoffs and job cuts. From buzzle (2012)[online]

Real Estate Bubble

a sector that is closely related to the financial crisis and unemployment, is the real estate sector. From the 1990s to 2000s the real estate rates in the United States had risen by 124%. Concepts such as refinancing, second mortgages, reckless lending and unnecessary price appraisals caused banking companies to fall into severe crisis of loss. Apart from that, foreclosed properties and short sale procedures started fetching lesser and lesser returns. People, either refused to buy or had defaulted mortgage loans. The blow was dire and a considerable number of banks and financial institutions started filing for bankruptcy. The first prominent example being bankruptcy of Lehman Brothers which was worth $600 billion in assets. The blow was so substantial that people associated with the bank also lost a mammoth amount of their liquidity had to bear financial troubles. Many companies who were associated with the bank filed for bankruptcy, initiated layoffs. Lehman itself lay off 1,200 of its personnel, while still in the initial phases of its decline. This crisis is also sometimes referred to as the sub-prime mortgage crisis of United States. From buzzle (2012)[online]

Automotive Industry Crisis

one of the biggest industry that was affected after the banking industry was the automotive industry. With a decline of banks and lending institutions, a large volume of lending facilities that provided car loans and auto loans, disappeared. Apart from loans, sectors such as international trade, foreign exchange and oil trade had been affected. The 2003 to 2008 lapse of enthusiasm in fuel trade had also drastically affected all fuel supply facilities, causing inflation in the costs of fuel. The automotive industry thus suffered from significant burdens such as loss of sales and markets, credit crunch for raw material and labor procurement, unwanted products, etc. The concluding effect was a terrible number of people being laid off. From buzzle (2012)[online]


the first three causes of unemployment in the United States are principally financial crisis. There are however other unemployment causes and consequences that have originated as a result of business practices. Outsourcing is one such practice where work is allocated to companies which are based in less developed economies, to benefit cheaper manpower hours. This practice has led to loss of job opportunities. From buzzle (2012)[online]

Iraq and Afghanistan Wars

The indirectly related causes are the two wars by the Bush administration. The United States Armed Forces which were involved in the Afghanistan invasion roughly amounted to 78,430. A permanent military installation of Kandahar Air Field amounted to $780-million and as of 2009; $1.6 billion has being spent on military installations in Afghanistan. In 2003 invasion of Iraq 248,000 troops were deployed in Iraq. The conclusion, United States government spends a $533.8 billion defense budget (as of 2010) and the foreign operation brings it to $663.8 billion. This amount is almost sufficient to revive many sectors in the economy.

The Obama administration has made it a point to make changes and revive the economy and also the United States unemployment.

In the United Kingdom some of the causes of unemployment are:

Lack of demand

Lack of supply

LACK OF DEMAND: When there isn’t enough demand employers will not need as many workers, and so it will result to demand-deficient unemployment.

Unemployment caused by supply-side factors results from imperfections in the labor market. A perfect labor market will always clear and all those looking for work will be working – supply will equal demand. However, if the market doesn’t clear properly there may be unemployment. This may happen because wages don’t fall properly to clear the market.

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Wages are initially too high and so unemployment of ab results (supply is greater than demand). To get rid of this unemployment and clear the market wages should fall. However, if they are ‘sticky-downwards’ this may not happen and the unemployment may persist.

Supply-side unemployment may also happen because there is occupational or geographical immobility. It may happen because there is poor information about job opportunities. This will lead to people taking a long time looking for jobs, increasing the level of frictional or search unemployment.

One final cause of unemployment which tends to be discussed less but is no less important is changes in the workforce. The workforce is made up of people who are of working age and not currently in full-time education. Their number will change with the demographic (age) structure of the population. If there is a baby-boom (a rapid increase in the birth rate) then these people will become of working age between 16 and 21 years later. They then join the work-force. If there are the same numbers of people retiring from the work-force at the other end, then unemployment will stay the same. However, following a baby boom there are often more joining the work-force than leaving? This may increase unemployment, unless there are enough extra jobs created to employ the extra people in the work-force. This was one of the causes of unemployment in the early 1980s when people born in the baby-boom of the 1960s joined the work-force.

Some of the causes of unemployment in Nigeria are:

EXPANSION OF EDUCATIONAL INSTITUTION IN NIGERIA: due to the rapid expansion of educational institution in Nigeria, has increased unemployment in Nigeria, because many students, graduate each year or individuals that has gone through any type of formal or informal training which has made it impossible to find a job due to the high number of individuals applying for a job.

RISING POPULATION IN NIGERIA: the rising population in Nigeria is one of the factors that have led to increase in unemployment. As a result of this increase in population it has increased the labor force rate and this has led to unemployment, because job opportunity is not increasing as population is increasing.

RURAL URBAN MIGRATION: individuals migrates from the rural area to the urban area in other to find a greener pasture where they swell the rank of the unemployed.

Rural —urban wage differential: due to the difference in wages between the rural area and the urban area, this has lead individuals to leave the rural areas to the urban area. This has increased the number of individuals unemployed in the urban areas.


Inadequate Educational Opportunities and Resources:

Quality education has a direct bearing on national prestige, greatness and cohesion. The knowledge and skill that young people acquire help determine their degree of patriotism and contribution to national integration and progress.

Between 2000 and 2004, about 30 per cent of Nigerian youth between 10 and 24 were not enrolled in secondary school (Population Reference Bureau, 2006). Perhaps the prohibitive cost of acquiring education is responsible.

The after effect of this situation is that thousands of young people roam the streets in cities in Nigeria. Those who manage to complete secondary school have no opportunities for tertiary education. Having been denied the chance to reach their potential, they are disorientated and readily available for anti-social actions.

Worse still, some who struggle to enroll in various educational institutions drop out due to lack of basic learning facilities. This situation is attributable to the dwindling resources of government at both federal and state levels as a result of economic meltdown.

Lack of Basic Infrastructure:

Most rural communities and urban slums in Nigeria have no access to potable water, health facilities, electricity, communication facilities, industries and commercial facilities, etc. Behind social unrest and youth restiveness in the country is the agitation for equitable distribution of resources.

Inadequate Communication and Information flow:

Communication creates room for sharing information. It helps people express their thoughts and feelings, clarify problems, and consider alternative ways of coping or adapting to their situation. Such sharing promotes social cohesion.

People must have access to communication facilities, to communicate with the people making the decisions that affect them. Sadly, rarely do people in Nigeria participate in decision-making processes on issues that affect their lives.

Effects of unemployment in Nigeria: Every year, over 300,000 graduates are churned out from the tertiary institutions nationwide. This number grows yearly and translates into more and more unemployed people littering the streets of Nigerian cities.

Mental health: Mental health problems like: Low self-confidence, feeling unworthy, depression and hopelessness. With the lost income and the frustration involved in it, the recently unemployed may develop negative attitudes toward common things in life and may feel that all sense of purpose is lost. Frequent emotions could be — low self-esteem, inadequateness and feeling dejected and hopeless.

Health diseases: The unemployment overall tension can increase dramatically general health issues of individuals. Tension at home: Quarrels and arguments at home front which may lead to tension and increased numbers of divorces etc.

Political issues: Loss of trust in administration and the government which may lead to political instability.

Tension over taxes rise: Unemployment also brings up discontent and frustration amongst the tax-paying citizens. In order to meet the demands of the unemployment fund, the government may have to increase the taxes thus giving way to restlessness amongst the tax-paying citizens. Gotten from vanguard(n.d)[online].

According to the research done Nigeria has a higher percentage of unemployment than United Kingdom and United States of America.


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