The impact of unemployment on economic growth in the Republic of Yemen: Standard study during the period 1990-2019

Abstract

Due to the high levels of unemployment in the Yemeni economy compared to their levels in other developing countries, where the annual growth rate of unemployment was about (5.2%) on average during the period 1991-2020, and its average relative importance was about (11.6%) of the total workforce on average during The same period, therefore the study focused on discussing the reality of unemployment and its current conditions in the Yemeni economy during the period (1991-2019), as well as measuring and analyzing the effect of unemployment rates on economic growth represented by the real gross domestic product in the Republic of Yemen, by conducting a standard study to assess the relationship in the two terms. The study used in that the joint integration according to the Bound Test model and the error correction model (UECM) within the framework of the ARDL approach. The most important results of the study and its recommendations were as follows: The existence of a long-term equilibrium relationship between unemployment rates and economic growth in the Yemeni economy during the period (1991-2019). Unemployment has a negative moral impact on economic growth in the short term, as an increase in unemployment rates by (1%) leads to a decrease in economic growth by (1.7%) in the short term. Unemployment has a negative moral impact on economic growth in the long term, as an increase in unemployment rates by (1%) leads to a decrease in economic growth by (2.1%) in the long term. The study recommends, in order to avoid the negative effects of unemployment on the Yemeni economy, to reduce its rates and increase employment rates.