Does Investment in Human Capital Offset Oil Dependence? Unveiling the Drivers of Unemployment in Uganda
Abstract
This study explored the impact of human capital development on unemployment in Uganda. Employing a Vector Auto Regression (VAR) model informed by the Neoclassical growth theory, the research analyzed the relationship between education expenditure (a human capital component) and unemployment, while controlling for physical capital (represented by GDP) and inflation. Utilizing annual data from 1986 to 2022, the findings revealed a complex dynamic. In the short run, higher real effective exchange rates (stronger local currency) and GDP growth might lead to a temporary rise in unemployment. However, the long-term picture suggests a positive influence of real exchange rates and GDP on unemployment, implying they contribute to lower unemployment over time. Interestingly, the study found no direct impact of international oil prices on Uganda's unemployment. The research concludes by highlighting the need for effective population management strategies, such as family planning and education, to ensure sustainable population growth that aligns with economic expansion.
Downloads
References
Al Faruq, M., & Yuliana, I. (2023). The effect of population growth on poverty through unemployment in East Java province in 2017-2021. Journal of Social Research, 2(6), 1900-1915.
Ali, O., Omar, M., & Yusuf, S. (2021). Population growth and unemployment in Zanzibar. International Journal of Sciences: Basic and Applied Research, 59(2), 36-47.
Ali, S., Yusop, Z., Kaliappan, S. R., Chin, L., & Meo, M. S. (2022). Impact of trade openness, human capital, public expenditure and institutional performance on unemployment: evidence from OIC countries. International Journal of Manpower, 43(5), 1108-1125.
Ayeni, A. O., & Omobude, O. F. (2018). Educational expenditure and economic growth nexus in Nigeria (1987-2016).
Bahadur, R. (2019). Impact of over-population on economic growth and development in India. International Journal of Research and Analytical Reviews, 6, 1-10.
Bala, U., Ibrahim, A., & Hadith, N. B. (2020). Impact of population growth, poverty and unemployment on economic growth. Asian Business Research Journal, 5, 48-54.
Bashir, A., & Amir, A. (2019). Relationship between government expenditure on education and GDP per capita in Pakistan: An ARDL Approach to Co-integration. Advances and Applications in Statistics, 55(1), 77-103.
Bhattacharyya, P. (2019). Public expenditure on education and economic growth: A state-level analysis in India. Humanities & Social Sciences Reviews, 7(6), 533-539.
Binuomoyo, O. K. (2020). Examining the Relationship between Public Spending on Education and Unemployment Problem in Nigeria. Malaysian Journal of Business and Economics (MJBE), 7(1), 57-57.
Bougrine, H. (2020). The theory of money, interest and unemployment. In Credit, Money and Crises in Post-Keynesian Economics (pp. 97-116). Edward Elgar Publishing.
CEBEC?, E., & Ay, A. (2016). The effects of health expenditures on economic growth: a panel regression analysis on BRICs countries and Turkey. Dumlupinar University Journal of Social Science/Dumlupinar Üniversitesi Soysyal Bilimler Dergisi.
Chandra, A. (2010). Does government expenditure on education promote economic growth? An econometric analysis. University Library of Munich, Germany.
?uki?, M. (2021). Comparison of Keynesian and (neo) classical economics.
Egessa, A., Nnyanzi, J. B., & Muwanga, J. (2021). Determinants of youth unemployment in Uganda: The role of gender, education, residence, and age. IZA Journal of Labor Policy, 11(1).
England, P., & Folbre, N. (2023). Reconceptualizing human capital. In A research agenda for skills and inequality (pp. 177-195). Edward Elgar Publishing.
Erasmus, E. G. (2021). Public expenditure and human capital development in Nigeria. Journal of Accounting and Financial Management, 7(2), 26-43.
Esen, E., & Çelik Keçili, M. (2021). Economic growth and health expenditure analysis for Turkey: evidence from time series. Journal of the knowledge economy, 1-15.
Farmer, K., & Schelnast, M. (2021). Involuntary unemployment in an OLG growth model with public debt and human capital. Growth and International Trade: An Introduction to the Overlapping Generations Approach, 193-222.
GIDEON, E. H. (2017). Impact of population growth on unemployment in Nigeria (Doctoral dissertation, American University of Nigeria, Department of Economics).
Gruzina, Y., Firsova, I., & Strielkowski, W. (2021). Dynamics of human capital development in economic development cycles. Economies, 9(2), 67.
Irawan, E. (2022). The effect of unemployment, economic growth and human development index on poverty levels in Sumbawa regency in 2012-2021. International Journal of Economics, Business and Accounting Research (IJEBAR), 6(2), 1286-1291.
Kamarudin, M. K. A., Abd Wahab, N., Mohamad, M., Saudi, A. S. M., & Samsurijan, M. S. (2018). Population growth and economic development in developing and developed countries. Int J Eng Technol, 7(4.34), 123-7.
Liotti, G. (2022). Labor market regulation and youth unemployment in the EU-28. Italian Economic Journal, 8(1), 77-103.
Maijama’a, R., Musa, K. S., Yakubu, M., & Mohammed, N. (2019). Impact of population growth on unemployment in Nigeria: Dynamic OLS approach. Journal of Economics and Sustainable Development, 10(22), 79-89.
Mallick, L., & Dash, D. P. (2015). Does Expenditure on Education Affect Economic Growth in India? Evidence from Cointegration and Granger Causality Analysis. Theoretical & Applied Economics, 22(4).
Mallick, L., Das, P. K., & Pradhan, K. C. (2016). Impact of educational expenditure on economic growth in major Asian countries: Evidence from econometric analysis. Theoretical and applied economics, 2(607), 173-186.
Manuhuttu, F. Y., & Kimirop, O. (2019). Determination of population growth against the level of unemployment in Merauke district. Int. J. Civ. Eng. Technol, 10, 10-20.
Maruthappu, M., Shalhoub, J., Tariq, Z., Williams, C., Atun, R., Davies, A. H., & Zeltner, T. (2015). Unemployment, government healthcare spending, and cerebrovascular mortality, worldwide 1981–2009: an ecological study. International Journal of Stroke, 10(3), 364-371.
Maruthappu, M., Watson, R. A., Watkins, J., Williams, C., Zeltner, T., Faiz, O., ... & Atun, R. (2016). Unemployment, public-sector healthcare expenditure and colorectal cancer mortality in the European Union: 1990–2009. International journal of public health, 61, 119-130.
Michaelides, P. G., & Papadakis, T. E. (2023). After having studied this chapter, the reader should be able to understand if Friedman’s theory of money is exogenous and why.• Explain Friedman’s monetaristic rule.• Analyse Friedman’s ideas on the NAIRU.• Formulate the ‘Quantity Theory of Money’. History of Economic Ideas: From Adam Smith to Paul Krugman, 93.
Mukisa, I., Nathan, S., & Bulime, E. W. (2020). Macroeconomic determinants of unemployment in the East African community. Tanzanian Economic Review, 10(2), 48-68.
Obayori, J. B., & Udeorah, S. A. F. (2020). The dynamic effect of population growth on the unemployment rate in Nigeria. South Asian Journal of Development Research, 2, 103-113.
Olowookere, J. K., Olanipekun, W. D., Sokunbi, G. M., & Aderemi, T. A. (2022). Human capital development and sustainable development: evidence from Nigeria. Studia Universitatis Babes-Bolyai Oeconomica, 67(1), 63-76.
Oni, L. B. (2014). Analysis of the growth impact of health expenditure in Nigeria. IOSR Journal of Economics and Finance, 3(1), 77-84.
Perrotta, C. (2021). Keynesian Policy Today: More Employment and More Human Capital. The Review of Keynesian Studies, 3, 127-156.
Piabuo, S. M., & Tieguhong, J. C. (2017). Health expenditure and economic growth-a review of the literature and an analysis between the economic community for central African states (CEMAC) and selected African countries. Health Economics Review, 7(1), 23.
Qehaja, S. S., Qehaja, D., Arber, H. O. T. I., & Marovci, E. (2023). The relationship between government health expenditure and economic growth: Evidence from western Balkan countries. International Journal of Applied Economics, Finance and Accounting, 15(1), 10-20.
Rathnasiri, R. A. (2020). Impact of public education expenditure on economic growth in Sri Lanka: Evidence from econometrics analysis.
Tanaka, Y. (2020). Involuntary Unemployment in a Neoclassical Model. Studia Universitatis Babes Bolyai-Oeconomica, 65(2), 12-28.
Wang, Q., & Li, L. (2021). The effects of population aging, life expectancy, unemployment rate, population density, per capita GDP, urbanization on per capita carbon emissions. Sustainable Production and Consumption, 28, 760-774.
Yang, X. (2020). Health expenditure, human capital, and economic growth: an empirical study of developing countries. International journal of health economics and management, 20(2), 163-176.
Copyright (c) 2024 Asaph Kaburura Katarangi, Frederick Nsambu Kijjambu, Benjamin Musiita
This work is licensed under a Creative Commons Attribution 4.0 International License.
Author (s) should affirm that the material has not been published previously. It has not been submitted and it is not under consideration by any other journal. At the same time author (s) need to execute a publication permission agreement to assume the responsibility of the submitted content and any omissions and errors therein. After submission of a revised paper in the light of suggestions of the reviewers, editorial team edits and formats manuscripts to bring uniformity and standardization in published material.
This work will be licensed under Creative Commons Attribution 4.0 International (CC BY 4.0) and under condition of the license, users are free to read, copy, remix, transform, redistribute, download, print, search or link to the full texts of articles and even build upon their work as long as they credit the author for the original work. Moreover, as per journal policy author (s) hold and retain copyrights without any restrictions.
