Impact of Population Growth, Poverty and Unemployment on Economic Growth

Abstract

This research explores the impact of population growth, poverty and unemployment on economic growth in Nigeria using Auto Regressive Distributed Lag (ARDL). The study employed an econometric procedure; unit root test which involved the use of Augmented Dickey Fuller test (ADF) and Phillip-Perron test (PP). The cointegration test technique used in the study is Auto Regressive and Distributed Lag (ARDL). The study variables are real GDP, population, poverty, unemployment and foreign direct investment has control variable. The null hypothesis stated that there is presence of a unit root was failed to be rejected at levels but rejected at first difference according to the two tests (ADP and PP) employed. The study found that some of the variables are stationary at level I(0) while others are stationary at first difference I(1).The results of the cointegration test showed that there exist cointegrating equation between explanatory variables and economic growth. The ECT speed of adjustment to the normal equilibrium confirms their long run relationship of the variables. Finally, the study found that population and FDI have a positive impact while poverty and unemployment has negative impact on GDP. Based on these findings recommend that policy makers should grow the real economic sectors to improve and enhance productivity, exports, job creation, curb inflation and reduce poverty and rapid economic growth and substitute the non-productive imports with domestic products and develop enabling environment to attract foreign private investors.

Determination of Poverty, Unemployment, Economic Growth, and Investment in West Sumatra Province

“…These estimates suggest that lower corporate tax rates and accelerated depreciation stimulate a similar investment increase [14]. Furthermore, the same result was also found by several researchers that high corporate tax rates discourage domestic and foreign fixed investment and therefore hinder economic growth [15]. This condition occurs because tax policy impacts the decisions of domestic and foreign investors [16].…”

“…Many research results show that investment and economic growth can absorb labor and reduce unemployment and poverty. However, there are still relatively few studies that examine the relationship among poverty, unemployment, investment, and economic growth simultaneously, especially in the area of West Sumatra [7][8][9][10][11][12][13][14][15][16][17][18][19][20]. Many research results only examine the impact and influence of investment and economic growth partially or separately on poverty and unemployment.…”

“…Poverty is seen as the inability of a person or household from an economic point of view to meet basic food and nonfood needs measured by the poverty line [11][12][13][14][15]. The poverty line is equivalent to spending a minimum of 2,100 kilocalories on food per day.…”

“…Economic growth is an indicator to see the success of development and is a condition for poverty reduction [11][12][13][14][15][16]. There is a correlation finding that there is a negative relationship between economic growth and poverty.…”

“…The decline in people's welfare due to unemployment will undoubtedly increase their chances of being trapped in poverty because they have no income. If unemployment in a country is high, political and social chaos will occur and harm people's welfare and prospects for economic development in the long term [15][16][17][18][19][20].…”