The Two Sides of the Coin of Youth Unemployment: Government and the Unemployed Individual

Abstract

Youth unemployment has been a challenge for many governments in developing economies including Ghana. This study examines one of the challenges in economic and social settings: the potential loss of revenue to the government due to youth unemployment. Using data from 2000 to 2020, the study explores a simple regression model to determine the correlation between the youth unemployment and the unemployment rate. The study also examined a Discounted Cash Flow Analysis to estimate the potential fiscal capacity loss to the state through youth unemployment within a ten-year range. This study concludes that youth unemployment is a loss of potential revenue receipts to the state, which is a loss of fiscal capacity for governments in developing economies. This phenomenon decelerates economic growth in developing economies. The study recommends that the government should partner with the private sector to curb unemployed youth cankers. Despite its defied solution and planned developments over the past two decades, Ghana is still struggling to permanently nab youth unemployment.