Determinants of unemployment in Uganda
Abstract
This study aimed at examining the determinants of Youth Unemployment in Uganda. Specifically, the study aimed at identifying the predictors of Youth Unemployment rate using explanatory variables Population total, GDP growth, Inflation rate, General Government final Consumption expenditure and Foreign Direct Investment.
Time series data obtained from the World Bank development indicators data bank from 1998- 2019 were used to analyze the relationship between unemployment and the explanatory variables specified above.
The data obtained facilitated the estimation of quantitative relationship among the variables.
The model was estimated by ordinary least squares (OLS) to obtain their impact on foreign exchange rate. Multiple linear regression function model was used in the study since the co-integration tests supported the alignment of the variables in linear fashion.
Results indicated that Population total had a positive coefficient and were significant in determining the level of Youth unemployment while FDI had a negative significant relationship therefore controlling population growth and promoting Foreign Direct Investment reduces the level of youth unemployment
. Inflation, General Government final Consumption expenditure and GDP growth were not significant at 5% level implying they had no influence on youth unemployment.
The government and policy makers are advised to strengthen policies that are geared to encourage reducing population such as family planning, supporting girl child education and promote FDI.