The impact of unemployment on economic growth in Sub-Saharan Africa

Abstract

This paper sought to estimate the impact of unemployment on the economic growth of Sub-Saharan Africa using panel data from 36 Sub-Saharan African countries in an interval period from 2007 to 2021. Estimating these impacts, a fixed effect model is chosen over the random effect model and pool OLS and the result from the analysis shows that the unemployment rate has a negative impact on economic growth in the studied countries. Indicating that as unemployment increases across the sub-Saharan countries, it results in a decrease in economic growth that has a detrimental effect on the economy of a country. The regression results show that combinations of economic freedom and good governance, along with fewer unemployed citizens, enhance a country’s economic growth. Generating productive jobs is crucial for eliminating poverty.

Keywords: Economic Growth, Unemployment, Fixed effect. Sub-Saharan Africa

JEL Code: E24, C01, C52

DOI: 10.7176/JAAS/83-04

Publication date: February 28^th 2024