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The Impact of Unemployment on Economic Growth in Pakistan: An Empirical Investigation

Author

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  • Salyha Zulfiqar Ali Shah

    (Assistant Professor, School of Economics, Bahauddin Zakariya University Multan, Pakistan)

  • Mah Rukh Shabbir

    (Ph.D. Scholar, School of Economics, Bahauddin Zakariya University Multan, Pakistan)

  • Sabiha Parveen

    (Visiting Lecturer, The Women University Multan, Pakistan)

Abstract

This study has attempted to scrutinize the impact of unemployment on the growth rate during the period 1974 to 2020 in Pakistan. This study has employed the Autoregressive Distributed Lag (ARDL) technique for empirical investigation. GDP growth rate is a dependent variable, employed as a proxy for economic growth. In the present study, explanatory variables are unemployment, population growth rate, rate of inflation, foreign direct investment and government expenditure. The empirical findings from the study show that unemployment and inflation rates both show a negative relationship with economic growth and are significant statistically. The population growth rate has a positive and statistically significant impact on economic growth. Short-run cointegration exists between the variables. It is suggested from the results that government should adopt adequate measures to generate employment opportunities to accelerate economic growth and reduce unemployment in the country.

Suggested Citation

  • Salyha Zulfiqar Ali Shah & Mah Rukh Shabbir & Sabiha Parveen, 2022. "The Impact of Unemployment on Economic Growth in Pakistan: An Empirical Investigation," iRASD Journal of Economics, International Research Alliance for Sustainable Development (iRASD), vol. 4(1), pages 78-87, March.
    • Handle: RePEc:ani:irdjoe:v:4:y:2022:i:1:p:78-87
    DOI: 10.52131/joe.2022.0401.0062
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    References listed on IDEAS

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    6. Diellza Kukaj, 2018. "Impact of Unemployment on Economic Growth: Evidence from Western Balkans," European Journal of Marketing and Economics Articles, Revistia Research and Publishing, vol. 1, ejme_v1_i.
    7. Seemab Gillani & Muhammad Nouman Shafiq & Tusawar Iftikhar Ahmad, 2019. "Military Expenditures and Health Outcomes: A Global Perspective," iRASD Journal of Energy and Environment, International Research Association for Sustainable Development (iRASD), vol. 1(1), pages 1-20, June.
    8. Hlalefang Khobai & Nwabisa Kolisi & Clement Moyo, 2018. "The Relationship Between Trade Openness and Economic Growth: The Case of Ghana and Nigeria," International Journal of Economics and Financial Issues, Econjournals, vol. 8(1), pages 77-82.
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    Cited by:

    1. Faiza Zahid & Kalsoom Durrani & Dr. Saeedah Shah & Dr. Shakeel Ahmed & Dr. Bashir Muhammad, 2023. "Youth Unemployment and Social Stability: Investigating the Linkages and Possible Solutions in the Context of Pakistan," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 12(4), pages 477-484.
    2. Dimakatso Sekwati & Mbulaheni Albert Dagume, 2023. "Effect of Unemployment and Inflation on Economic Growth in South Africa," International Journal of Economics and Financial Issues, Econjournals, vol. 13(1), pages 35-45, January.

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