Unemployment and Its Determinants:A Study of Pakistan Economy (1999-2010)

Abstract

This study has been conducted to determine the determinants which cause the unemployment in economy of Pakistan for the period of 1999-2010. Unemployment is political and social issue in all the countries. In this foreign direct investment, gross domestic product rate, CPI based inflation rate and population growth rate is taken as explanatory variables. In this study ordinary least square model is used for determining the results. Findings of this paper shows that foreign direct investment, gross domestic product rate and CPI based inflation rate has negative impact on unemployment. Population growth rate has positive relationship with unemployment and it contributes to unemployment. This study also confirmed the tradeoff between inflation and unemployment.

Keywords: Unemployment, Foreign Direct Investment, Gross Domestic Product, Inflation Rate