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The effect of unemployment on economic growth in South Africa (1994-2016)

Author

Listed:
  • Sibusiso Clement Makaringe

    (Department of Economics, Nelson Mandela University)

  • Hlalefang Khobai

    (Department of Economics, Nelson Mandela University)

Abstract

This study sought to investigate the trends and impact of unemployment on economic growth in South Africa using quarterly data over the period 1994Q1 to 2016Q4. The Auto Regressive Distribution Lag (ARDL) bounds test approach is applied to determine the existence of the long run linkage among the variables. The results from the ARDL model suggest that there is a long run relationship between unemployment and economic growth. The empirical results obtained confirmed that there is a negative relationship between unemployment and economic growth both in the long and short run.

Suggested Citation

  • Sibusiso Clement Makaringe & Hlalefang Khobai, 2018. "The effect of unemployment on economic growth in South Africa (1994-2016)," Working Papers 1815, Department of Economics, Nelson Mandela University, revised Mar 2018.
    • Handle: RePEc:mnd:wpaper:1815
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    File URL: http://repec.mandela.ac.za/RePEc/mnd/wpaper/paper.1815.pdf
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    Cited by:

    1. Hlongwane, Nyiko Worship & Daw, Olebogeng David, 2021. "An increase of electricity generation can lead to economic growth in South Africa," MPRA Paper 111018, University Library of Munich, Germany.
    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.
    3. Byaro, Mwoya & Mafwolo, Gemma & Ngereza, Caroline, 2023. "Does unemployment in sub-Saharan Africa have asymmetric effects on health? A panel quantile approach," The Journal of Economic Asymmetries, Elsevier, vol. 28(C).
    4. Md Mazharul Islam & Majed Alharthi & Md Wahid Murad, 2021. "The effects of carbon emissions, rainfall, temperature, inflation, population, and unemployment on economic growth in Saudi Arabia: An ARDL investigation," PLOS ONE, Public Library of Science, vol. 16(4), pages 1-21, April.
    5. repec:osf:osfxxx:rfcuj_v1 is not listed on IDEAS
    6. Michael Takudzwa Pasara & Rufaro Garidzirai, 2020. "Causality Effects among Gross Capital Formation, Unemployment and Economic Growth in South Africa," Economies, MDPI, vol. 8(2), pages 1-12, April.
    7. Shabir Mohsin Hashmi & Ali Gul Khushik & Muhammad Akram Gilal & Zhao Yongliang, 2021. "The Impact of GDP and Its Expenditure Components on Unemployment Within BRICS Countries: Evidence of Okun’s Law From Aggregate and Disaggregated Approaches," SAGE Open, , vol. 11(2), pages 21582440211, June.
    8. 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.
    9. Mustafa Orhan Özer, 2022. "The Relationship between Economic Growth and Unemployment Rate: Fractional Frequency Fourier ARDL Bounds Test Approach," Istanbul Journal of Economics-Istanbul Iktisat Dergisi, Istanbul University, Faculty of Economics, vol. 72(72-1), pages 269-292, June.
    10. Nagara, Patria & , yolanda, 2020. "The economic growth and affecting factors in Sumatera island," OSF Preprints rfcuj, Center for Open Science.
    11. Abdul-Malik Abdulai, 2023. "The impact of remittances on economic growth in Ghana: An ARDL bound test approach," Cogent Economics & Finance, Taylor & Francis Journals, vol. 11(2), pages 2243189-224, June.
    12. Karikari-Apau, Ellen & Abeti, Wilson, 2019. "The Impact of Unemployment on Economic Growth in China," MPRA Paper 96100, University Library of Munich, Germany.
    13. Stungwa, Sanele & Tozamile, Siphuxolo, 2021. "Testing Okun’s law in South Africa," MPRA Paper 110936, University Library of Munich, Germany.

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    Keywords

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    JEL classification:

    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
    • B22 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Macroeconomics
    • C30 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - General
    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General

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