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Growth-youth unemployment nexus in upper-middle-income countries in Sub-Saharan Africa
Abstract
Abstract. The issue concerning growth-youth unemployment nexus has not been verified with respect to upper middle-income countries (UMIC) in Sub-Saharan Africa (SSA). The importance of this paper is to ascertain the relationship between economic growth and youth unemployment based on panel and individual countries data in term of annual series data from 1991 to 2017. To achieve the objective of this paper, data were sourced from the World Bank development indicators, for GDP growth rate and youth unemployment rate. Several statistical and econometric tests were conducted, the results obtained revealed that the average GDP-growth rate was 6.36% while youth unemployment rate was 32.30% for UMIC in SSA. The individual countries statistics indicated that Gabon has the highest GDP-growth rate of 21.01% while the highest youth unemployment rate was in South Africa with 47.30%. The lowest GDP-growth rate was observed in South Africa while the lowest youth unemployment was observed in Equatorial Guinea with 11.69%. The empirical results indicated that there exists a long-run and positive relationship between the variables of GDP-growth rate and youth unemployment rate in UMIC in SSA and that Okun’s law is not applicable in these countries. Based on the results obtained statistically it revealed high rate of youth unemployment and low rate of GDP-growth within the period of study, hence this paper suggest that individual countries in the UMIC in SSA should implement youth employment scheme in order to reduce the level of unemployment with respect to this age cohort. Creation of jobs for youth will help to reduce the economic and social costs associated with youth unemployment especially in countries like South Arica, Namibia, Botswana and Gabon. The UMIC in SSA are encouraged to boost their level of economic activities through investment in order to stimulate employment of young-able body persons in UMIC in SSA.
Keywords. Economic growth, Youth unemployment, Upper middle-income countries, Sub-Saharan Africa, Okuns’s coefficient.
JEL. O40, O57, J64.Keywords
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DOI: http://dx.doi.org/10.1453/ter.v6i1.1852
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