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Unemployment and Output Growth: Evidence from Upper-Middle-Income Countries in Sub-Saharan Africa

American Economic & Social Review

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Title Unemployment and Output Growth: Evidence from Upper-Middle-Income Countries in Sub-Saharan Africa
 
Creator Abraham, Ihensekhien Orobosa
Nosa, Aisien Leonard
 
Description Several studies have found a negative relationship between unemployment rate and output growth rate. But such has not been ascertained concerning upper middle-income countries in Sub-Saharan Africa (SSA). Hence this paper examined this relationship using Panel Least Squares and Ordinary Least Squares estimation techniques based on annual series data from 1991 to 2017. The paper observed that the average output growth rate for upper middle-income countries in SSA in the period of the study was 6.36% while that of the unemployment average rate was 15.87%. The results of the panel Least Squares estimation reveals the existence of negative relationships between unemployment rate and output growth rate. In the country specific study, results from Botswana, Gabon, Mauritius and South Africa shows a positive relationship between unemployment and output growth rates revealing a case of non-inclusive growth. However, Equatorial Guinea and Namibia data on unemployment and output growth had negative relationships. The counter factual analyses conducted on the unemployment variable in term of some percentage reduction indicated that as more persons are employed there will be an increase in output growth. The findings, therefore suggests that the  government should  create more jobs based on labour intensive industries in upper middle-income countries in SSA, that the ratio of output growth needed to maintain  stable level of unemployment rate could be sustained when there are boost in economic activities. Countries in upper middle-income in SSA  that exhibited positive relationship between unemployment rate and output growth rate should concentrate more on how to increase the level of output growth rate through the boost in economic activities. Governments of these upper middle-income countries should have good policy mix focused on the reduction of unemployment at all levels.
 
Publisher Centre for Research on Islamic Banking & Finance and Business
 
Date 2018-11-16
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
 
Format application/pdf
 
Identifier https://www.cribfb.com/journal/index.php/aesr/article/view/206
10.46281/aesr.v3i1.206
 
Source American Economic & Social Review; Vol 3 No 1 (2018): American Economic & Social Review; 32-43
2576-1277
2576-1269
 
Language eng
 
Relation https://www.cribfb.com/journal/index.php/aesr/article/view/206/234
 
Rights Copyright (c) 2018 Ihensekhien Orobosa Abraham, Aisien Leonard Nosa
http://creativecommons.org/licenses/by/4.0