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Economic Growth and Unemployment Rate. Case of Albania

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  • Emirgena Nikolli

Abstract

This thesis studies the relationship between the economic growth and the unemployment rate in Albania. This relation is known as Okun's law, which states that 1 percent decrease in unemployment; GDP will increase by 3 percent. Albania is one of the countries that have a sluggish development and impact of unemployment is negative in the economy of the country. At the same time the economy itself effect the employment of the people. The unemployment occurs when people are without work or seeking work. During recession there is a high unemployment rate. Even some peaks of the development like in the Total Factor Productivity, integration or infrastructure there have been recession and a bad time for the Albania too. This affected the investments, the business and by lowering their profits they are obligated to lay off employees. So the unemployment rate starts to rise up. This study takes in consideration the years from 2000 to 2013 when the unemployment was rising day by day with negative impact in the economy. This thesis introduces the general relationship between gross domestic product and unemployment. The methodology used a simple regression and takes the economic growth as dependent variable and the unemployment rate as independent. The observed result didn't explain the Okun's law for Albania. The main reason is the current crises that prevent the improvement of economic conditions.

Suggested Citation

  • Emirgena Nikolli, 2014. "Economic Growth and Unemployment Rate. Case of Albania," European Journal of Social Sciences Education and Research Articles, Revistia Research and Publishing, vol. 1, May - Aug.
    • Handle: RePEc:eur:ejserj:31
    DOI: 10.26417/ejser.v1i1.p217-227
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    References listed on IDEAS

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    1. Peter R. Fallon & Robert E. B. Lucas, 2002. "The Impact of Financial Crises on Labor Markets, Household Incomes, and Poverty: A Review of Evidence," The World Bank Research Observer, World Bank Group, vol. 17(1), pages 21-45.
    2. Lee, Jim, 2000. "The Robustness of Okun's Law: Evidence from OECD Countries," Journal of Macroeconomics, Elsevier, vol. 22(2), pages 331-356, April.
    3. Robert E. Hall, 2010. "Why Does the Economy Fall to Pieces after a Financial Crisis?," Journal of Economic Perspectives, American Economic Association, vol. 24(4), pages 3-20, Fall.
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    Cited by:

    1. Rolle Remi Ahuru & Romanus Osabohien & Mamdouh Abdulaziz Saleh Al‐Faryan & Eseosa Joy Sowemimo, 2023. "Information and communication technology adoption and unemployment in West Africa Monetary Zone," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(1), pages 388-398, January.
    2. Malayaranjan SAHOO & Jayantee SAHOO, 2019. "The relationship between unemployment and some macroeconomic variables: Empirical evidence from India," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(1(618), S), pages 115-128, Spring.
    3. Nguyen Hoang Quy, 2016. "Relationship between Economic Growth, Unemployment and Poverty: Analysis at Provincial Level in Vietnam," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 8(12), pages 113-119, December.
    4. repec:agr:journl:v:1(618):y:2019:i:1(618):p:115-128 is not listed on IDEAS
    5. Ugyen Tenzin, 2019. "The Nexus Among Economic Growth, Inflation and Unemployment in Bhutan," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 20(1), pages 94-105, March.

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