Author:
Kilishi Abdullahi Abdulhakeem,Adebowale Hammed Adesola,Oladipupo Sodiq Abiodun
Abstract
Purpose
This paper aims to investigate the nexus between economic institutions (EI) and unemployment in sub-Saharan African (SSA) countries. Specifically, the paper examines the impact of aggregate EI and ten different components of institutions on total, male and female unemployment in SSA.
Design/methodology/approach
The paper used unbalanced panel data of 37 SSA countries covering the period between 1995 and 2018. A dynamic heterogenous panel data model is specified for the study. Two alternative estimation techniques of dynamic fixed effect and pool mean group methods were used to estimate the models. The choice of appropriate method is based on Hausman specification test.
Findings
The findings reveal that aggregate EI and institutions related to the monetary system, trade flows, government spending and fiscal process significantly lead to less unemployment in the long-run. However, there is no evidence of a significant relationship between EI and unemployment in the short-run. These findings are consistent for total, male and female unemployment, respectively.
Practical implications
To reduce unemployment significantly in the long run, policymakers in SSA need to build more market-friendly institutions that will incentivize private investment, allow free movement of labour and goods, as well as guarantee a stable macroeconomic environment and efficient fiscal system.
Originality/value
Most of the existing studies focused on the influence of labour market institutions on unemployment ignoring the effects of other forms of institutions. While available studies on the link between institutions and unemployment used either OECD or other developed countries sample, with scanty evidence from Africa. However, the effects of EI could vary across regions. Thus, generalizing the findings from developed countries for SSA countries and other developing countries may be misleading. Hence, this paper contributes to the existing literature by examining the nexus between different types of EI and unemployment using the SSA sample.
Subject
Political Science and International Relations,Economics and Econometrics,Development
Reference25 articles.
1. Institutional determinants of unemployment in OECD countries: does the deregulatory view hold water?;International Organization,2007
2. Structural unemployment: how important are labour market policies and institutions?;Canadian Public Policy/Analyse de Politiques,2000
3. Minimum wage in Sub-Saharan Africa: a primer;The World Bank Research Observer,2017
4. The role of shocks and institutions in the rise of European unemployment: the aggregate evidence;The Economic Journal,2000
5. The impact of economic freedom on the unemployment rate in O.E.C.D. nations: an exploratory study accepting the validity of Okun’s law;International Economics,2016
Cited by
3 articles.
订阅此论文施引文献
订阅此论文施引文献,注册后可以免费订阅5篇论文的施引文献,订阅后可以查看论文全部施引文献