Vocation Training, Labour Participation and Economic Growth in Uganda.
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Date
2025-10-23
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Makerere University Business School
Abstract
This research aimed to investigate the relationship between Vocational Training (VT), labor participation, and economic growth in Uganda. The study addressed the gap in empirical evidence regarding the interconnections among the variables in the Ugandan context. The study employed a quantitative research design using time series data from 1990 to 2022, focusing on key variables: Vocational Training, labor participation rates, and real GDP growth. The analysis utilized a Vector Autoregression (VAR) model in first differences to examine the short-term dynamic relationships among these variables. The results indicate a complex interplay between Vocational Training and labor participation, revealing a delayed positive short-run effect of Vocational Training on labor participation. Additionally, the study finds a positive relationship between labor force participation and economic growth, suggesting that short-term increases in participation drive economic productivity. Conversely, Vocational Training was found to have a negative effect on GDP growth, indicating that increased enrolment in vocational training has a negative effect on GDP growth, possibly due to misalignment of skills or other structural issues. Furthermore, gross capital formation as a control variable exhibits a negative long-term effect on GDP growth, implying potential inefficiencies in capital allocation. The Granger causality test established a bidirectional predictive relationship between labor participation and economic growth. This research contributes to the existing literature by providing empirical evidence on the effects of vocational training on labor market outcomes and economic growth in Uganda. The findings underscore the importance of aligning vocational training programs with market demands to enhance their effectiveness and promote sustainable economic development. The study offers valuable insights for policy makers aiming to improve the vocational education landscape and address unemployment challenges in Uganda.
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This is a master's thesis.
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Citation
Muzahuura, R. (2025). Vocation Training, Labour Participation and Economic Growth in Uganda. (Unpublished master's dissertation). Makerere University Business School, Kampala, Uganda.