University of Khartoum

The Relationship between Unemployment and Economic Growth in Sudan (1970- 2013)

The Relationship between Unemployment and Economic Growth in Sudan (1970- 2013)

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Title: The Relationship between Unemployment and Economic Growth in Sudan (1970- 2013)
Author: Ibrahim, Walaa Ibrahim Mahgoub
Abstract: The relationship between unemployment and economic growth, reveals the available opportunities for developing the economy, and help macro-economic variables to deal efficiently and effectively to contribute to increasing economic growth rates. Therefore, this study aims to study the relationship between unemployment rates and gross domestic product (GDP) rates in Sudan. The study uses descriptive methods and econometric models to analyze the relationship between unemployment rates and the gross domestic product (GDP) rates in Sudan during the time period 1970 – 2013. The study used two variables, the unemployment rates as independent variable and the gross domestic product (GDP) rates as dependent variable. The first step of the econometric analysis was to test the stationarity for the two variables; unemployment rates and the gross domestic product (GDP) rates on the basis of the Augmented Dickey-Fuller test and it was found that both variables are non-stationary at level but became stationary at first difference. Then the Johansen test was performed to assess whether there was cointegration between the variables and the results depicted cointegrating relation among the two variables under study. These relationships were modeled using an ordinary least square (OLS) regression. Results show a negative and statistically significant relationship between unemployment rates and gross domestic product rates in Sudan, where a 1% increase in unemployment rates leads to decreasing gross domestic product rates by 0.4%. This study recommends job creation by investing in productive sectors. It also recommends to conduct more studies in the area of labor market in order to reduce the mismatch between educational programs and the needs of the labor market and to design policies that matches educational outcomes with labor market requirements.
URI: http://khartoumspace.uofk.edu/123456789/27157


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