Background to the Study
Unemployment is one of the developmental problems currently facing all developing economies of the world Adekola, Allen, Olawole, Akanbi &Adewumi, (2016) and Nigeria is not an exception. Unemployment or joblessness occurs when people arewithout jobs and they have actively sought work within the past five weeks (Fajana, 2000). It is the consequence of the surplus of labour supply over labour demand. The unemployment rate is a measure of the prevalence of unemployment and it is calculated as a percentage by dividing the number of unemployed individuals by all individuals currently in the labour force.
Njoku &Ihugba, (2011) defined unemployed as the percentage of the percentage of the labour force that is without job, but is able and willing to work. In Nigeria however the ability and willingness to work is not sufficient. It is necessary for the unemployment to be registered with an employment bureau in order to be recognized as unemployed. Yet, from an economic viewpoint, the unregistered unemployed are part of the labour force and are, therefore, technically unemployed. In Nigeria, unemployment data are obtained through labour force sample surveys which ask if the respondent has worked in the week preceding the survey. However, the international labour organization (ILO), realizing the shortcomings of the labour survey as it affects developing economies, such as Nigeria, with a large informal sector, has encouraged a review of the methodology to incorporate further disaggregation of respondent responses to bring out the true rate of unemployment.
Unemployment is generally seen as a macro-economic problem as well as socio-economic problem. Unemployment arises as a result of insufficient and non-availability of jobs to correspond with the growing population, even those who are employed sometimes live with the fear of being unemployed due to job insecurity and retrenchment of workers. There is employment of factors of production if they are engaged in production. The term unemployment could be used in relation to any of the factors of production which is idle and not being utilized properly for production. However, with reference to labour, there is unemployment if it is not possible to find jobs for all those who are eligible and able to work. Labour is said to be underemployed if it is working below capacity or not fully utilized in production (Anyawu 1993). Unemployment can either be voluntary or involuntary. Voluntary in the sense that one chooses not to work because he or she has means of support other than employment. Example is an idle rich man. On the other hand, involuntary unemployment exists when persons who are eligible and willing to work at the prevailing rate of pay are unable to find work.
The higher the unemployment rate in aneconomy the higher would be the poverty level andassociated welfare challenges (Emeh, Araboh& James 2012).Unemployment has been grouped into two categories: first,the older unemployed who lost their jobs throughretrenchment, redundancy, or bankruptcy; and second, theyounger unemployed, most of who have never beenemployed (Oyebade, 2003). Unemployment is a global challenge, but worse indeveloping countries of the world, with attendant social,economic, political, and psychological consequences. Itcontributes to low GDP and leads to increase in crime andviolence, psychological effect, adverse effect on health andpolitical instability (Njoku &Ihugba, 2011). Unemploymentin not a recent challenge in Nigeria as the nationalunemployment rate rose from 4.3 per cent in 1970 to 6.4 percent in 1980. This fluctuated around 6.0 per cent until 1987when it rose to 7.0 per cent (Akintoye 2003). Structural Adjustment Program wasbrought in place by the Federal Government of Nigeria in1986 to tackle unemployment challenge. This was a biteffective as unemployment rate declined from 7.0 per centin 1987, to as low as 1.9 per cent in 1995. After this, it roseto 2.8 per cent in 1996, and has been growing worse since,hovering between 2.8 and 13.1 per cent between 1996 and2000 (Njoku &Ihugba, 2011). Unemployment rate inNigeria is presently growing at the rate of 16 per cent annually with the youth impacted the most and accountingfor three times the general unemployment (Doreo, 2013).
In the study of unemployment in Africa, Okonkwo (2005) identified 3 causes of unemployment, the educational system, the choice of technology which can either be labour intensive or capital intensive and inadequate attention to agriculture. The use of machines to replace work done by labour and computerization has contributed to these social problems in the sense that what for example 40 men can do manually a machine will only need like 5 men. Therefore, the remaining 35 are unemployed;more so, lack of enough education and skill to have access to credit and capital. One particular feature of unemployment in Nigeria is that it was more endemic in the early 1980‟s than any other period.
According to Udabah (1999) cited in Nnabuihe, (2013), the major factor contributing to low standard of living in underdeveloped countries in their relative inadequate or inefficient utilization of labour in comparism with advanced nations. Unemployment rate is measured by the proportion of the labour force that is unemployed divided by the total number of the labour force. The total labour force was projected at 61,249,485 in 2007 indicating an increase of 3.9%. Total employment in 2007 stood at 52,326,923 compared with 50,886,836 in 2006. This represents an annual increase of 2.8%. In 2008, unemployment rate increased from 3.9% to 12.7%. In 2009, 2010 and 2011 unemployment rate still increased to 19.7%, 21.1% and 23.9% respectively in Nigeria (IMF, 2014). According to World Data Atlas (n.d.), unemployment in Nigeria rose to 34.44% in 2016. The labour force consists of the number of people ageing 18 and over who are employed (that is, those who currently have jobs) and unemployed (those who do not have jobs but who are actively looking for work).Individuals who do not fall into either of these group such as retired people and discouraged workers are not included in the calculation of the labour force.
Unemployment according to Agbodike brings about economic waste and cause human suffering. According toOsinubi, (2006) as cited in Nnabuihe, (2013), unemployment is as a result of the inability to develop and utilize the nations manpower resources effectively especially in the rural sector. The socio-economic effect of unemployment includes: fall in national output, increase in rural-urban migration, waste of human resources, high rate of dependency ratio, poverty, depression, frustration, all sorts of immoral acts and criminal behaviour e.g. prostitution, armed robbery etc. The social effect of unemployment brings to light the need to proffer possible solution to salvage our nation Nigeria.