The unemployment rate is one of the most important indicators of economic growth. Reducing unemployment is crucial to ensuring inclusive growth in a country. This paper analyses the relationship between the unemployment rate and other macroeconomic variables in the Southern African Development Community (SADC). The purpose of the study is to compare and understand the observed unemployment disparities between southernmost and the rest of the SADC countries. It draws on the theoretical framework of the Phillips curve and Okun's law and uses static panel data and fully modified ordinary least squares techniques (FM-OLS) to estimate the empirical model. Annual data for the period 1991 to 2020 are used. Analyses are conducted both at the aggregate SADC data level and at the subgroup level, i.e. at the Southern African Customs Union (SACU) and non-SACU country levels. Diagnostic tests are conducted to ensure the robustness of the models. The empirical results of this study show that labour productivity, external debt and population have significant effects on unemployment across the SADC region. Inflation, labour productivity and population have significant effects in SACU, while external debt, labour productivity and population have significant effects in non-SACU countries. Gross domestic product (GDP) growth and foreign direct investment (FDI) have mixed but insignificant effects on the unemployment rate, indicating a low employment elasticity of growth in the region.
| Identifer | oai:union.ndltd.org:UPSALLA1/oai:DiVA.org:sh-49643 |
| Date | January 2022 |
| Creators | Zgambo, Atusaye |
| Publisher | Södertörns högskola, Nationalekonomi |
| Source Sets | DiVA Archive at Upsalla University |
| Language | English |
| Detected Language | English |
| Type | Student thesis, info:eu-repo/semantics/bachelorThesis, text |
| Format | application/pdf |
| Rights | info:eu-repo/semantics/openAccess |
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