Effect of Population Growth on Youth Unemployment in Uganda (1991-2021)

Abstract

Uganda has experienced high rate of youth unemployment in the past few years. Evidence has shown that population growth has followed an upward trend. The purpose of this study was to investigate the effect of population growth on youth unemployment rate in Uganda. This study utilized time series approach over the data from 1991 to 2020. Augmented Dickey Fuller unit root test technique was adopted to determine the order of integration of the variables used. The Autoregressive Distributed Lag Model (ARDL) was employed to estimate the short-run relationship as well as the long run relationship between population growth and youth unemployment rate in Uganda. Pair wise Granger causality test was used to determine the causal relationship among the key variables of the study. Findings from the unit root test showed that the variables were stationary at different levels. It was discovered that in the short run that population growth rate and the secondary education have positive relationship with youth unemployment rate in Uganda. However, the effect of population growth rate on youth unemployment is not statistically significant. Further evidence revealed that population growth rate has a positive and statistically significant effect on youth unemployment in the long run. An increase in population growth would lead to 0.48% increase in youth unemployment in the long run in Uganda. Evidence from the Granger causality test revealed a unidirectional causality between population growth rate and youth unemployment. This result supports the long run result that reveal a positive effect of population growth on youth unemployment. Government policies should be geared towards creating jobs for the youth population in the country. Private organizations should be encouraged by the government by putting in place favorable policies to work with so that productivity, revenue can also increase and there will be an increase in the employment rate. Provision for investment fund can be provided for youth to start up small scale businesses so as to reduce the rate of unemployment and also seminars can be organized by the government to teach youth various skills that can help them make good income on their own, by so doing, the rate of unemployment will reduce and the rate of manufacturing and production in the economy will improve which will lead to an increase in the economic growth of Uganda.