Industrialization and Youth Unemployment in Nigeria: An Autoregressive Distributive Lag (ARDL) Approach

Johnson Akpan Atan; Ubong Edem Effiong

doi:doi:10.11648/j.ijber.20200905.15

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Industrialization and Youth Unemployment in Nigeria: An Autoregressive Distributive Lag (ARDL) Approach

Johnson Akpan Atan, Ubong Edem Effiong

Published in International Journal of Business and Economics Research (Volume 9, Issue 5)

Received: 11 August 2020 Accepted: 20 August 2020 Published: 21 September 2020

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Abstract

This paper is an empirical investigation into the role of the industrial sector in curbing youth unemployment in Nigeria using time series data that covers the period 1991 to 2019. The data were subjected to unit root test using the Augmented Dickey Fuller and Philip-Peron test techniques. THE data was analysed using the ARDL approach and Granger causality test. The result of the unit root test reported that the variables were integrated in mixed order of levels and first difference. This mixed order of integration necessitated the use of the ARDL Bounds test for cointegration. From the bounds test, there exist a long-run/levels relationship between youth unemployment and the explanatory variables. Also, the error correction term (-0.6215) showed that 62.15% of the short-run disequilibrium is corrected annually. The result further revealed that industrial output exerts a negative effect on youth unemployment both in the short-run and in the long-run. This implies that increasing the volume of industrial activities will reduce youth unemployment. The Granger causality test also showed that there exists causal relationship between youth unemployment and industrialization in Nigeria. The paper therefore recommended the need for boosting industrialization in Nigeria as it will curb massive youth unemployment in the country rather than advocating on entrepreneurship. This is because a strong industrial base will spring up more jobs than new ventures who are noted for folding up within few years of operations.

Published in	International Journal of Business and Economics Research (Volume 9, Issue 5)
DOI	10.11648/j.ijber.20200905.15
Page(s)	324-334
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2020. Published by Science Publishing Group

Keywords

Youth Unemployment, Industrialization, Bank Credit, ARDL, Cointegration

References

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[2]	National Bureau of Statistics (2018). Labour force statistics, Volume 1: Unemployment and underemployment report.
[3]	Folabi, F. (2013). “Obasanjo Sustains Anxiety in PDP”. Retrieved on 29/5/2013. https://dailyindependentnig.com/2013/03/as-obasanjo-sustains-anxiety-in-pdp.
[4]	Onwukwe, N. U. (2003). Fundamentals of microeconomics. Abakaliki: Printwell Press Ltd.
[5]	African Economic Outlook (2017). Entrepreneurship and industrialization. Available at: www.africaneconomicoutlook.org.
[6]	Lin, J. Y. and Monga, C. (2013). Comparative advantage: The silver bullet of industrial policy. In: J. E. Stiglitz and J. Y. Lin (eds.), The Industrial Policy Revolution 1: The Role of Government Beyond Ideology, pp. 19-38, UK: Palgrave Macmillan.
[7]	Okurebia, S. O. (2014). Industrialization, youth employment and capacity utilization in Africa: Some fundamental problems. European Journal of Business and Management, Vol. 6, No. 27.
[8]	Central Bank of Nigeria (2019). Statistical bulletin.
[9]	Ukommi, A. S., Agha, E. O. and Ekpenyong, O. A. (2013). Industrial development and youth unemployment: The case of Crushed Rock Quarry Industry, Ishiagu in Ebonyi State. Knowledge Review, Volume 28, No. 1.
[10]	Torado, M. P. and Smith, S. C. (2011). Economic development. Eleventh edition. Harlow: Pearson Education Limited.
[11]	Islam, N. and Yokota, K. (2008). Lewis growth model and China’s industrialization. Asian Economic Journal, 22, pp. 359-396.
[12]	Zang, X., Yang, J. and Wang, S. (2010). China has reached the Lewis turning point. International Food Policy Research Institute (IFPRI) discussion paper, 977, Washington, D. C.
[13]	Dauda, R. O. S. (2004). An economic assessment of the industrial sector in Nigeria’s fledging fourth Republic. International Journal of Social Sciences, 3 (1): 136-149.
[14]	Olusoji, M. O. and Oderinde, O. L. (2017). Industrialization, growth and employment in Nigeria. Selected Papers for the 2017 Conference Proceedings of the Nigerian Economic Society.
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[16]	Lapova, A. and Szirmai, A. (2012). Industrialization, employment and poverty. UNU-MERIT Working Paper No. 81.
[17]	Ogbimi, F. E. (2007). Promoting sustainable economic growth and industrialization: Solution to mass unemployment and poverty. African Journal of Traditional, Complementary and Alternative Medicines.
[18]	World Bank (2019). World development indicators. Yipping, H. and Tingsong, J. (2010). What does the Lewis turning point mean for China? A computable general equilibrium analysis. China Centre for Economic Research Working Paper.

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Johnson Akpan Atan, Ubong Edem Effiong. (2020). Industrialization and Youth Unemployment in Nigeria: An Autoregressive Distributive Lag (ARDL) Approach. International Journal of Business and Economics Research, 9(5), 324-334. https://doi.org/10.11648/j.ijber.20200905.15

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Johnson Akpan Atan; Ubong Edem Effiong. Industrialization and Youth Unemployment in Nigeria: An Autoregressive Distributive Lag (ARDL) Approach. Int. J. Bus. Econ. Res. 2020, 9(5), 324-334. doi: 10.11648/j.ijber.20200905.15

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Johnson Akpan Atan, Ubong Edem Effiong. Industrialization and Youth Unemployment in Nigeria: An Autoregressive Distributive Lag (ARDL) Approach. Int J Bus Econ Res. 2020;9(5):324-334. doi: 10.11648/j.ijber.20200905.15

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@article{10.11648/j.ijber.20200905.15,
  author = {Johnson Akpan Atan and Ubong Edem Effiong},
  title = {Industrialization and Youth Unemployment in Nigeria: An Autoregressive Distributive Lag (ARDL) Approach},
  journal = {International Journal of Business and Economics Research},
  volume = {9},
  number = {5},
  pages = {324-334},
  doi = {10.11648/j.ijber.20200905.15},
  url = {https://doi.org/10.11648/j.ijber.20200905.15},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijber.20200905.15},
  abstract = {This paper is an empirical investigation into the role of the industrial sector in curbing youth unemployment in Nigeria using time series data that covers the period 1991 to 2019. The data were subjected to unit root test using the Augmented Dickey Fuller and Philip-Peron test techniques. THE data was analysed using the ARDL approach and Granger causality test. The result of the unit root test reported that the variables were integrated in mixed order of levels and first difference. This mixed order of integration necessitated the use of the ARDL Bounds test for cointegration. From the bounds test, there exist a long-run/levels relationship between youth unemployment and the explanatory variables. Also, the error correction term (-0.6215) showed that 62.15% of the short-run disequilibrium is corrected annually. The result further revealed that industrial output exerts a negative effect on youth unemployment both in the short-run and in the long-run. This implies that increasing the volume of industrial activities will reduce youth unemployment. The Granger causality test also showed that there exists causal relationship between youth unemployment and industrialization in Nigeria. The paper therefore recommended the need for boosting industrialization in Nigeria as it will curb massive youth unemployment in the country rather than advocating on entrepreneurship. This is because a strong industrial base will spring up more jobs than new ventures who are noted for folding up within few years of operations.},
 year = {2020}
}

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TY - JOUR
T1 - Industrialization and Youth Unemployment in Nigeria: An Autoregressive Distributive Lag (ARDL) Approach
AU - Johnson Akpan Atan
AU - Ubong Edem Effiong
Y1 - 2020/09/21
PY - 2020
N1 - https://doi.org/10.11648/j.ijber.20200905.15
DO - 10.11648/j.ijber.20200905.15
T2 - International Journal of Business and Economics Research
JF - International Journal of Business and Economics Research
JO - International Journal of Business and Economics Research
SP - 324
EP - 334
PB - Science Publishing Group
SN - 2328-756X
UR - https://doi.org/10.11648/j.ijber.20200905.15
AB - This paper is an empirical investigation into the role of the industrial sector in curbing youth unemployment in Nigeria using time series data that covers the period 1991 to 2019. The data were subjected to unit root test using the Augmented Dickey Fuller and Philip-Peron test techniques. THE data was analysed using the ARDL approach and Granger causality test. The result of the unit root test reported that the variables were integrated in mixed order of levels and first difference. This mixed order of integration necessitated the use of the ARDL Bounds test for cointegration. From the bounds test, there exist a long-run/levels relationship between youth unemployment and the explanatory variables. Also, the error correction term (-0.6215) showed that 62.15% of the short-run disequilibrium is corrected annually. The result further revealed that industrial output exerts a negative effect on youth unemployment both in the short-run and in the long-run. This implies that increasing the volume of industrial activities will reduce youth unemployment. The Granger causality test also showed that there exists causal relationship between youth unemployment and industrialization in Nigeria. The paper therefore recommended the need for boosting industrialization in Nigeria as it will curb massive youth unemployment in the country rather than advocating on entrepreneurship. This is because a strong industrial base will spring up more jobs than new ventures who are noted for folding up within few years of operations.
VL - 9
IS - 5
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Author Information

Johnson Akpan Atan

Department of Economics, Faculty of Social Sciences, University of Uyo, Uyo, Nigeria
Ubong Edem Effiong

Department of Economics, Faculty of Social Sciences, University of Uyo, Uyo, Nigeria

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APA Style

Johnson Akpan Atan, Ubong Edem Effiong. (2020). Industrialization and Youth Unemployment in Nigeria: An Autoregressive Distributive Lag (ARDL) Approach. International Journal of Business and Economics Research, 9(5), 324-334. https://doi.org/10.11648/j.ijber.20200905.15

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ACS Style

Johnson Akpan Atan; Ubong Edem Effiong. Industrialization and Youth Unemployment in Nigeria: An Autoregressive Distributive Lag (ARDL) Approach. Int. J. Bus. Econ. Res. 2020, 9(5), 324-334. doi: 10.11648/j.ijber.20200905.15

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AMA Style

Johnson Akpan Atan, Ubong Edem Effiong. Industrialization and Youth Unemployment in Nigeria: An Autoregressive Distributive Lag (ARDL) Approach. Int J Bus Econ Res. 2020;9(5):324-334. doi: 10.11648/j.ijber.20200905.15

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@article{10.11648/j.ijber.20200905.15,
  author = {Johnson Akpan Atan and Ubong Edem Effiong},
  title = {Industrialization and Youth Unemployment in Nigeria: An Autoregressive Distributive Lag (ARDL) Approach},
  journal = {International Journal of Business and Economics Research},
  volume = {9},
  number = {5},
  pages = {324-334},
  doi = {10.11648/j.ijber.20200905.15},
  url = {https://doi.org/10.11648/j.ijber.20200905.15},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijber.20200905.15},
  abstract = {This paper is an empirical investigation into the role of the industrial sector in curbing youth unemployment in Nigeria using time series data that covers the period 1991 to 2019. The data were subjected to unit root test using the Augmented Dickey Fuller and Philip-Peron test techniques. THE data was analysed using the ARDL approach and Granger causality test. The result of the unit root test reported that the variables were integrated in mixed order of levels and first difference. This mixed order of integration necessitated the use of the ARDL Bounds test for cointegration. From the bounds test, there exist a long-run/levels relationship between youth unemployment and the explanatory variables. Also, the error correction term (-0.6215) showed that 62.15% of the short-run disequilibrium is corrected annually. The result further revealed that industrial output exerts a negative effect on youth unemployment both in the short-run and in the long-run. This implies that increasing the volume of industrial activities will reduce youth unemployment. The Granger causality test also showed that there exists causal relationship between youth unemployment and industrialization in Nigeria. The paper therefore recommended the need for boosting industrialization in Nigeria as it will curb massive youth unemployment in the country rather than advocating on entrepreneurship. This is because a strong industrial base will spring up more jobs than new ventures who are noted for folding up within few years of operations.},
 year = {2020}
}

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