The Refugee Effect

Theoretical Framework

This study is built on two theoretical assumptions namely; the refugee effect and Schumpeter effect of unemployment and entrepreneurship.

The Refugee Effect The refugee effect as a theoretical stance stems from the effort to deflate unemployment phenomena among people through entrepreneurship activity. This theoretical assumption can be traced back to the work of Oxenfeldt (1943), who submitted that people who are challenged with unemployment and low prospects for securing wage employment frequently move to self-employment as a workable alternative. This thought was also found in Knight’s view that individuals are bound to make decision within three states – unemployment, self-employment and employment. The simple theory

In the research conducted by Garofoli (1994) and Audretsch and Fritsch (1994) was discovered that unemployment is adversely related to new-firm startups, that is, as new businesses are established employability is stimulated and unemployment reduces substantially. Similarly, Lucas (1978) and Jovanovic (1982) observed that increase unemployment in the society is related to a low degree of entrepreneurial activities, that is, where tendency to set up enterprises is low; the degree of unemployment would be very high. The consequence of the above assertion is that those who are unemployed tend to remain unemployed because they have lower endowments of human capital and entrepreneurial talents required to start and sustain new firms to keep them going. A low degree of entrepreneurship culture and skills in any society may be an outcome of a low economic growth, which also reproduces higher levels of unemployment (Audretsch, 1995, Oladele, P.O. et al,

This study was conducted in Lagos State, Nigeria. Lagos State is the commercial and industrial nerve of Nigeria, is the home for the highest number of industries and commercial establishments in Nigeria. It is the smallest state in Nigeria with an area of 356,861 hectares of which 75,755 hectares are wetland, yet it has the highest population which is over five per cent (17.5 million) of the national estimate (National Population Census, 2006). Lagos state consists of twenty (20) Local Government Councils and thirty-seven (37) local Government Development Areas. However, the researchers employed multi-stage sampling technique to select four (4) LGAs (Apapa, Oshodi/Isolo, Eti-Osa, Somolu /Yaba LGDA, and Ikeja) from which the targeted respondents were reached. The targeted respondents were registered candidates of Lagos Empowerment and Resource Network (Apapa); PEI Center Entrepreneurship Skill Acquisition (Ikeja); Eti-Osa Skill Acquisition Center (Eti-Osa) and Yaba Skill acquisition Centre (Somolu/Yaba). A total number of 326 respondents were used for the study. Data was gathered through a semi-structured questionnaire. The questionnaire was distributed to the respondents by the researchers with the support of two (2) research assistants, while the respondents were allowed to fill the questionnaire on their own, without any influence or manipulation from the researchers. The content validity of the research instrument