Unemployment, Entrepreneurship and Economic Growth: Evidence from Cameroon

Abstract

The paper investigates the relationship between unemployment, entrepreneurship development and growth in Cameroon. Using co-integration and error correction techniques on time series data from 1980 to 2014 collected from the World Bank Database, the results revealed that there was a negative but insignificant relationship between unemployment and entrepreneurship development in Cameroon both in the short and the long run. However when controlled for factors such as domestic credit to the private sector, trade openness and taxation, further findings indicated that domestic credit to the private sectorpositively and significantly affect entrepreneurship in the short run while trade openness and taxation have a positive and significant effect on entrepreneurship development only in the long run. Also, it was found out that entrepreneurship development was a key determinant of economic growth both in the short and long run. The paper therefore recommends that the government should implement a prudent tax policy that can stimulate entrepreneurship without hampering economic growth as well as put in place measures that will instil entrepreneurial skills in the population and more especially the youth.

Keywords: Unemployment, Entrepreneurship, Economic growth, Cameroon

JEL Classification:B30, B53, C11, C23, O10, O40