Population Growth and Youth Unemployment in Uganda (1991-2014)

ABSTRACT 

This study was motivated by the fact the Uganda has one of the fastest population growth rates in the world accompanied by high unemployment rates thus the study aimed at investigating the relationship between population growth rates and youth unemployment in Uganda (1991 to 2014). The specific objectives of the study were; to find out the long run relationship between the population growth rate and youth unemployment rate in Uganda, to examine the causality between population growth and youth unemployment as well as to determine the effect of population growth rate on youth unemployment rate in Uganda. The hypothesis of the study was; there is no significant relationship between population growth rate and youth unemployment, There is no granger causality between population growth rate and youth unemployment rate in Uganda and there is no significant effect of population growth rate on youth unemployment rate in Uganda. The study was carried out using secondary data collected from 1991 to 2014. Augmented Dickey- Fuller (ADF), tests were carried out on the variables of population growth rate and youth unemployment and were found to non-stationary at level but stationary after first difference. Cointegration results of Trace and Maximum Eigenvalue findings showed that there is no long run relationship between population growth rate and youth unemployment. Granger causality tests also indicated that population growth causes youth unemployment in Uganda. A regression model encompassing all variables under study was developed to help assess how population growth rate in Uganda impacts youth unemployment rate. The results indicate that the independent variables account for 40.3% changes in youth unemployment rate. The overall model was significant on the basis of the F-statistic and the coefficient of determination that was reported by the data. The study concluded that there is appositive significant relationship between population growth rate and youth unemployment as was revealed from the model. Thus, having discovered that there is a problem of rampant population growth rate in Uganda; this study recommended that there is need to formulate population control measures like family planning methods that are aimed at reducing that rate at which population of Uganda grows. To encounter the problem of increasing youth unemployment, the study recommended that there should be proper and adequate education system and training facilities that empowers young men and women with skills that make them job creators rather than job seekers.

TABLE OF CONTENTS

DECLARATION

APPROVAL

DEDICATION

ACKNOWLEGDEMENTS iv

LIST OF TABLES

LIST OF FIGURES

TABLE OF CONTENTS

LIST OF ACRONYMS! ABBREVIATIONS xi

ABSTRACT

CHAPTER ONE: INTRODUCTION

1.0 Background 1

1.1.1 Historical Perspective I

1.1.2 Conceptual Perspective 3

.1.3 Theoretical Perspective 5

1.1.4 Contextual Perspective 7

1.2 Problem Statement 9

1.3 Purpose of the Study 10

1.4 Specific Objectives of the Study 11

1 .5 Research Questions 11

1.6 Research Hypothesis 11

1.7 Scope

1.7.1 Geographical Scope 11

1.7.3 Content Scope 12

1.7.4 Time Scope 12

1.8 Operational definitions 12

CHAPTER TWO: LITERATURE REVIEW .14

2.0 Introduction 14

2.1 Theoretical Review 14

2.2 Conceptual Framework 17

2.3 Effect of population growth on youth unemployment 18

2.4 Relationship between population growth and youth unemployment 19

2.5 Empirical Studies 20

2.6 Research gap 26

CHAPTER THREE:RESEARCH METHODOLOGy 28

3.0 Introduction 28

3.1 Research Design 28

3.2 Model Specification 28

3.3 Data Sources 29

3.4 Research Techniques 29

3.4.1 Time Series Analysis 29

3.4.2 Testing for Stationarity 30

3.4.3 The Augmented Dickey-Fuller (ADF) Test 30

3.4.4 Cointegration 31

3.4.5 Granger Causality Test 32

3.4.6.0 Diagnostic Tests 32

3.4.6.1 Normality Test 32

3.4.6.2 Serial Correlation Test 33

3.4.6.3 Heteroscedasticity Test 33

3.4.6.4 Multicollinearity Test 33

3.5 Ethical Consideration 34

3.6 Ascriptions of authorships: 34

3.6.1 Scientific Adjudication 34

CHAPTER FOUR: DATA ANALYSIS AND INTERPRETATION OF RESULTS 35

4.0 Introduction 35

4.1.0 Descriptive Summary 36

4.1.2 Unit Root Test Results Using the ADF test 38

4.2 Results of the long run relationship between population growth rate and youth unemployment rate in Uganda 41

4.3 Results Granger causality between population growth and youth unemployment in Uganda. 43

4.4 Results of the effect of population growth rate on youth unemployment rate in Uganda 44

4.4.llnterpretation of the model of the above model 44

4.5 Diagnostic Tests 45

4.6. Hypothesis testing 47

CHAPTER FIVE: DISCUSSIONS, CONCLUSIONS AND RECOMMENDATIONS 48

5. 1.0 Discussions and Conclusions 48

5.1.1 Long run relationship between population growth rate and youth unemployment rate in Uganda(1991-2014) 48

5.1.2 Granger causality between population growth and youth unemployment in Uganda (1991-2014) 49

5.1.3 The effect of population growth rate on youth unemployment rate in Uganda (1991- 2014) 49

5.2. Conclusions 50

5.2.1 Relationship between population growth and youth unemployment 50

5.2.2 Granger causality between Population growth and youth unemployment in Uganda 51

5.2.2 Effect of population growth on youth unemployment 51

5.3 Policy Recommendations 52

5.4 Limitations of the Study 53

5.5 Suggestions for Further Research 54

5.6 Contribution to the Existing Knowledge 54

REFERENCES

APPENDICES 64

Appendix I: Trends of the variables before testing for stationary 64

Appendix 11: Trends of the variables after first difference 64

Appendix iii: Normality test of residuals of the regression analysis 65

Appendix IV: Data used in the study 66