A Assessing the Sustainability and Effect of Graduate Unemployment Interventions on the Economic Growth of Ghana

Abstract

Job creation is a major concern of every government and almost every government’s priority is to ensure jobs
are created. Various government employment policy papers have seen interventions from the Vision 2020,
Ghana Poverty Reduction Strategy Paper, Ghana Shared Growth Development Agenda and Agenda for Jobs.
However, there are little or no efforts to sustain government’s graduate unemployment interventions due to
Ghana’s nature of politics. In the mid-1990s, the Vision 2020 agenda which is focused on employment
initiatives and policies to help reduce unemployment had its share of failure. This study aimed at analyzing the
sustainability of government’s graduate employment interventions and its impact on the economy of Ghana
from 1992 to 2018. Quantitative investigation was employed in the study using Growth Rate and Graduate
Unemployment as its main variables; sourcing quantitative data from World Development Indicators. The study
followed the Okun’s ‘Rule of Thumb’ and a first differenced log-linear regression model. It also employed
Dickey-Fuller (DF) and Philips-Perron (PP) tests to ensure accuracy in comparison and consistency. The result
showed consistency with Okun’s Law. With a 5% significance level, the elasticity of real GDP to Graduate
Unemployment is negative. This shows a 1% increase in Graduate unemployment will amount to 0.054%
decrease in real GDP. The study also revealed that the winner takes all syndromes in Ghana’s politics affected
the sustainability of government interventions on graduate unemployment. It was concluded that government
interventions on graduate unemployment were unsustainable and affects its output since successive
governments abolish or change the name of previous interventions. Therefore, there is little or no new jobs
created. To create jobs, Ghana must have a realistic long term plan of data-driven employable policies and
subsequently connect its GDP growth to employment opportunities.