Economic Growth and Unemployment in Uganda (1991 2014)

Abstract 

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 analyse 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 1% 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 hypotheses 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 being done.

Table of contents

Declaration

Approval

Dedication

Acknowledgement iv

List of Abbreviations and Abbreviations v

Table of contents

List of Tables ix

List of Figures

CHAPTER ONE 1

INTRODUCTION 1

1.1 Background ofthe Study 1

1.1.1 Historical perspective 1

1.1.2Theoretical perspective 5

1.1.3 Conceptual perspective 6

1.1.4 Contextual Perspective 7

1.2 Problem statement 10

1.3 Purpose of the study 10

1.4 Objective of the study 10

1.4.1 Specific objective 10

1.5 Research questions 11

1.6 Null-Hypothesis test 11

1.7 Scope of the study 11

1.7.1 Geographical scope 11

1.7.2 Theoretical scope 11

1.7.2.0 Okun’s Law 11

1.7.2.2 Keynesian theory of unemployment 12

1.8 Content scope 12

1.9 Time scope 12

1.10 Significance of the study 12

CHAPTER TWO .13

LITERATURE REVIEW 13

2.0 Introduction 13

2.1 Theoretical review 13

2.1.1 Okun’s Law 13

2.1.2 Neoclassical Growth Model (The Solow Model) 15

2.1.3 Keynesian theory of unemployment 16

2.2 Conceptual review 16

2.2.0 Economic Growth 16

2.2.1 Unemployment 18

2.3. Conceptual framework 20

2.4 Related Study 20

2.4.0 Economic Growth 20

2.4.1 Unemployment 21

2.4.2 The Relationship Between Economic Growth And Unemployment 22

2.6. Research Gap 25

CHAPTER THREE 26

METHODOLOGY 26

3.0 Introduction 26

3.1 Data type, source and collection techniques 26

3.2 Research design 26

3.3 Data analysis 26

3.4 Ethical consideration 27

3.5 Limitations of the study 27

CHAPTER FOUR 28

DATA PRESENTATION , AND INTERPRETATION 28

4.0 Introduction 28

4.1 Test for presence of autocorrelation 28

CHAPTER FIVE 31

SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS 31

5.0 Introduction .31

5.1. To determine the relationship between economic growth and unemployment levels in Uganda (1991/2014) 31

5.2 Conclusion 33

5.3 Recommendation 33

REFERENCES 35

Appendices 39

Appendix II: Consent Letter For The Organizations 39

Appendix II. Time Frame For The Research Study 40

Appendix III: Researcher’s Curriculum Vitae 41