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The Impact of Unemployment on Economic Growth in China

Author

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  • Karikari-Apau, Ellen
  • Abeti, Wilson

Abstract

Economic growth which is considered as one of the best indicator of measuring the robustness of every economy is essential in understanding its relationship with unemployment which is an important macroeconomic indicator that reflects the incompetence of any economy to make full use of its human resources. Hence, a macro-economic secondary and time series data was extracted from the World Development Indicator (WDI) for the period of 1991-2018 in China. In conducting the econometric analysis of the study, both the Augmented Dickey-Fuller Test and Phillips Perron Test were employed to test and confirm the stationary level of the variables of study; the Autoregressive Distributed Lagged (ARDL) cointegration and the ARDL Bounds test were employed to test for the short-run and the long-run cointegration of the variables of study since both variable were stationary at first difference I (1). The finding of the study reveals that there are negative short-run and a long-run relationship between unemployment and economic growth. However, Granger causality Test also reveals that both unemployment and economic growth do not impact each other.

Suggested Citation

  • Karikari-Apau, Ellen & Abeti, Wilson, 2019. "The Impact of Unemployment on Economic Growth in China," MPRA Paper 96192, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:96192
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    References listed on IDEAS

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    2. Md. Noman Siddikee & Jawadur Rahim Zahid & Athya Sanjida & Polina Oshchepkova, 2022. "Sustainable economic growth and unemployment nexus of SDG 2030: Bangladesh in Asia," SN Business & Economics, Springer, vol. 2(1), pages 1-20, January.
    3. Syahira Nasir & Salwaty Jamaludin & Sharul Shahida Shakrein Safian & Nazurah Abdul Malek & Muhammad Ridzuan Abdul Aziz, 2024. "Revisiting Okun's Law: Evidence from Malaysia," Information Management and Business Review, AMH International, vol. 16(3), pages 551-561.
    4. 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.

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    Keywords

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    JEL classification:

    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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