Population Growth and Youth Unemployment in Somalia (1991-2017)

ABSTRACT The purpose of the study was to investigate the effect of population growth on youth unemployment in Somalia from 1991 to 2016. The specific objectives of the study was to examine the long-run relationship, causation, and effect of population growth on youth unemployment rate. The study used crosssectional and longitudinal research design for the data obtained from World Bank where stationarity test was conducted using ADF tests prior to estimation. Unemployment,Gdp growth, population growth and gross capital formation were nonstatinary at levels but all were stationary at first differences. Cointegration test indicated existence of cointegration and hence a long run relationship between population growth and unemployment rate since the p-value of 0.0023 is less 0.05. The granger causality test concluded significant causation between population growth and unemployment rate . A multiple log-linear regression model of first difference of unemployment rate, population growth, Gross domestic product growth rate and gross capital formation was fitted, the results indicated significant relationship at 5% level of significance. The study concluded that there is a long run relationship between population growth and unemployment rate. There was significant causation between population growth and youth unemployment rate and the effect of population growth on unemployment was significant. There was also normality of the error term suggesting robustness in the estimation. It is recommended that the government and non-governmental organizations should invest rather on the youth through relevant training, skilling and proper manpower planning to increase productivity. There is also need to create an enabling environment for self-employment, entrepreneurship and other productive ventures for the youth instead of controlling population, gross capital formation and GDP growth.

  TABLE OF CONTENTS

DECLARATION..............................................................................................................................................i

APPROVAL....................................................................................................................................................ii

DEDICATION ..............................................................................................................................................iii

ACKNOWLEGDEMENTS.............................................................................................................................iv

LIST OF TABLES..........................................................................................................................................v

TABLE OF CONTENTS ...............................................................................................................................vi

LIST OF ABBREVIATIONS ....................................................................... Error! Bookmark not defined.

CHAPTER ONE : INTRODUCTION.......................................................... Error! Bookmark not defined.

1.1 Background .............................................................................................. Error! Bookmark not defined.

1.1.1. Historical Perspective.................................................................... Error! Bookmark not defined.

1.1.2 Conceptual Perspective.................................................................. Error! Bookmark not defined.

1.1.3 Theoretical Perspective.................................................................. Error! Bookmark not defined.

1.1.4 Contextual Perspective .................................................................. Error! Bookmark not defined.

1.3 Purpose of the Study................................................................................ Error! Bookmark not defined.

1.4 Specific Objectives of the Study............................................................... Error! Bookmark not defined.

1.5 Research Questions ................................................................................. Error! Bookmark not defined.

1.6 Research Hypotheses............................................................................... Error! Bookmark not defined.

1.7 Scope........................................................................................................ Error! Bookmark not defined.

1.7.1 Geographical Scope........................................................................ Error! Bookmark not defined.

1.7.2 Theoretical Scope........................................................................... Error! Bookmark not defined.

1.7.3 Content Scope................................................................................. Error! Bookmark not defined.

1.7.4 Time Scope...................................................................................... Error! Bookmark not defined.

1.9 Operational definitions............................................................................ Error! Bookmark not defined.

CHAPTER TWO:LITERATURE REVIEW .................................................. Error! Bookmark not defined.

2.1 Introduction ............................................................................................. Error! Bookmark not defined.

2.2 Theoretical Review................................................................................... Error! Bookmark not defined.

2.3 Effect of population growth on youth unemployment............................ Error! Bookmark not defined.

2.4 Relationship between population growth and youth unemployment.... Error! Bookmark not defined.

2.5 Empirical Studies...................................................................................... Error! Bookmark not defined.

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2.6 Research gap............................................................................................ Error! Bookmark not defined.

CHAPTER THREE:METHODOLOGY......................................................... Error! Bookmark not defined.

3.1 Introduction ............................................................................................. Error! Bookmark not defined.

3.2 Research Design....................................................................................... Error! Bookmark not defined.

3.3 Model specification.................................................................................. Error! Bookmark not defined.

3.4 Data Sources ............................................................................................ Error! Bookmark not defined.

3.5 Research Techniques ............................................................................... Error! Bookmark not defined.

3.5.1 Cointegration................................................................................... Error! Bookmark not defined.

3.5.2 Time series Analysis....................................................................... Error! Bookmark not defined.

3.5.3 Testing for Stationarity.................................................................. Error! Bookmark not defined.

3.5.4 The Augmented Dickey-Fuller (ADF) Test.................................. Error! Bookmark not defined.

3.5.5 Phillip Perron Unit test.......................................................................... Error! Bookmark not defined.

3.5.6 Granger Causality Test .................................................................. Error! Bookmark not defined.

3.6 Ethical Consideration ............................................................................... Error! Bookmark not defined.

3.7 Ascriptions of authorships....................................................................... Error! Bookmark not defined.

3.7.1 Scientific adjudication .................................................................... Error! Bookmark not defined.

3.8 Limitations of the study ........................................................................... Error! Bookmark not defined.

CHAPTER FOUR:DATA ANALYSIS AND INTERPRETATION OF RESULTS.........................................36

4.1 Introduction ..........................................................................................................................................36

4.1.0 Descriptive Summary .........................................................................................................................37

4.1.2 Unit Root Test Results Using the ADF test.........................................................................................38

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

Somalia........................................................................................................................................................41

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

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

4.4.1 Interpretation of the model of the above model ..............................................................................45

4.5 Diagnostic Tests ....................................................................................................................................45

CHAPTER FIVE:DISCUSSIONS, CONCLUSIONS AND RECOMMENDATIONS....................................48

5.1. Discussions of Findings ........................................................................................................................48

5.1.1 Long run relationship between population growth and youth unemployment rate in Somalia ......48

5.1.2 Granger causality between Population growth and youth unemployment in Somalia ....................49

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5.1.3 The effect of population growth on youth unemployment rate in Somalia .....................................50

5.2 Conclusion.............................................................................................................................................51

5.2.1 Long run relationship between population growth and youth unemployment................................51

5.2.2 Granger causality between Population growth and youth unemployment in Uganda.....................52

5.2.3 The effect of population growth and youth unemployment.............................................................52

5.3 Policy Recommendations......................................................................................................................52

5.4 Contribution to the existing Knowledge ...............................................................................................53

5.5 Suggestions for Further Research.........................................................................................................53

REFERENCES .............................................................................................................................................55

Appendix I: Normality test.........................................................................................................................62

Appendix III: (Granger causality test ).........................................................................................................62

Appendix III: Data used in the study ...........................................................................................................63