Economic growth and unemployment in Uganda (1991 - 2014)

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Kampala International University; College of Higher Degrees and Research
This post-graduate thesis presents a regression analysis of the accumulated empirical evidence on the relationship between economic growth and unemployment in Uganda. Okun’s law emphasis the relationship between economic growth and unemployment stating that there is inverse relationship among economic growth and unemployment. Even so, sometimes both variables move towards same direction meaning an increase of economic growth leads to a rise of unemployment. The researcher employed correlation design with linear regression analysis using Statistical Package for Social Science (SPSS) to analyze the empirical impacts of economic growth on unemployment in Uganda. The data of these both variables were confidential and were taken from the Ugandan Bureau Of Statistics and World Bank as this thesis concerned in Uganda. The result of findings showed that there is weak negative correlation between economic growth and unemployment in Uganda from 1991 to 2014. The analysis displayed that 1% increase of economic growth reduces 2.3% of the unemployment in Uganda which is acceptable according the Okun’s law, saying “ to reduce unemployment in l% point during a year, the economic growth must grow nearly 2% points faster than the rate of growth of potential economic growth over that period. The regression analysis further showed that the null hypothesis was rejected as critical value of F (0.159) is greater than 0.05 of significant level. The researcher recommended according to the findings that Uganda should not emphasize the economic growth more to reduce the unemployment in the country but the other variables (investment, inflation, government policies etc) that affect the unemployment after when research is being done.
A research thesis submitted to the College of Higher Degrees and Research in partial fulfillment of the requirement for the Award of Master’s Degree in Economic Policy and Planning of Kampala International University, Uganda.
Economic growth, Unemployment