Macroeconomic Determinants of Unemployment in Ethiopia: Time Series Analysis
| dc.contributor.advisor | Mesele Araya (PhD) | |
| dc.contributor.author | Hailu Daba | |
| dc.date.accessioned | 2025-10-29T11:00:51Z | |
| dc.date.available | 2025-10-29T11:00:51Z | |
| dc.date.issued | 2025-05-26 | |
| dc.description.abstract | The purpose of this paper was to examine empirically the long-run and short-run relationships between unemployment and its macroeconomic determinants over 1993-2023, comprising gross domestic product (RGDP), foreign direct investment (FDI), external debt (EXDE), Government effectiveness (GOEF), and Political instability (POST) in the country. The World Development Index (WDI), the International Labor Organization (ILO), annual reports, and published research were the sources of the data. The Augmented Dickey Fuller (ADF) and Philips-Perron (PP) tests are used to test the data for unit root, and the results indicate that all of the study's variables are non-stationary at level and stationary in their initial differences. Johansen cointegration analysis and the Error Correction model (ECM) testing methodology were used in this investigation. The study's conclusions show a positive and significant relationship between political instability and government effectiveness, a negative and significant relationship between real GDP and foreign direct investment, and a short-term, positive but negligible relationship between external debt and unemployment. In the long run there is positive and statistically significant relationship between unemployment and gross domestic products, foreign direct investment (FDI), external debt as well as negative and significant relationship between Government effectiveness and Political instability in the country for the period under examination. The study recommends that Ethiopia should use proper planning and strategic policy interventions to achieve higher sustainable economic growth with Real growth domestic product (RGDP) growth, foreign direct investment (FDI), External debt (EXD), government effectiveness (GOEF) and Political stability (POST). Finally the study suggests macroeconomic policies and strategies focusing on increasing economic growth, focusing on agriculture, enhancing infant domestic industries instead of attracting FDI and address the appropriateness of each economic sector for their attractiveness of unemployed groups, reduce external loan and safe itself from external debt overhang, increase aggregate supply and consolidate the existing entrepreneurship, with improved rule of law and government effectiveness and should give due attention to reduce unemployment in Ethiopia. | |
| dc.identifier.uri | https://etd.aau.edu.et/handle/123456789/7541 | |
| dc.language.iso | en | |
| dc.publisher | A.A.U | |
| dc.title | Macroeconomic Determinants of Unemployment in Ethiopia: Time Series Analysis | |
| dc.type | Thesis |