Youth Unemployment and Economic Growth: Lesson From Low-Income Countries in Sub-Saharan Africa
Youth Unemployment and Economic Growth: Lesson From Low-Income Countries in Sub-Saharan Africa

Summary/Abstract: The paper examines the empirical relationship between youth unemployment rate and economic growth rate in low-income countries in Sub-Saharan Africa (SSA). To achieve the objectives of the paper, Panel Least Squares and Ordinary Least Squares techniques were adopted to estimate the model using annual data from 1991 to 2013. The paper found that the average GDP growth rate for low-income countries in SSA within the period of the study was 3.8 % while that of average youth unemployment rate was 9.4%. It was observed there exists negative relationships between youth unemployment and economic growth variables inthe panel result while in the individual countries cases some countries were found to have positive relationship between the two variables of unemployment and economic growth rates indicating a case of non existence of Okun’s law. Hence, the negative coefficients observed indicated the existence of Okun’s law in some low-income countries. The findings, therefore, suggest that individual countries should create more jobs based on labour intensive industries, that the governments of these low-income countries should promote youth empowerment schemes by creating the needed policy environment, that the ratio of output growth needed to maintain stable level of youth unemployment rate could be sustained when there are boost in economic activities that will encouraged investment and employment. Few countries that exhibited positive relationship between youth unemployment rate and economic growth rate should focus more on how to increase the level of economic activities through the application of policy mix that would generate more investment in these countries.

• Details
• Contents