Economic Determinants of Unemployment in Pakistan: Co-integration Analysis
Ahmed Raza Cheema, Ambreen Atta

Abstract
Among major and burning issues in Pakistan is the problem of unemployment. This study finds the determinants of unemployment by applying the ARDL bound approach using the time series data from 1973 to 2010.The results indicate that unemployment has statistically significant positive relationships with output gap, Productivity and Economic Uncertainty while it has statistically significant negative relationships with Gross Fixed Investment and Openness of Trade . At a policy level it is suggested that output gap should be decreased (i.e., policies focusing on increasing GDP should be adopted and implemented). Government should adopt depreciation policy along with reduction in trade restrictions. Not only should government himself undertake investment projects, but it should also encourage private investment.

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