Factors Affecting Unemployment in Somalia

Abstract

This study is an attempt to investigate the determinants of unemployment in Somalia. Annual data series is used from the period 1995 to 2014. Unit root test is used to check the stationarity of the variables and employed Ordinary least squares (OLS) regression method. Johansen co-integration technique was applied to determine long run relationship between the variables. Granger causality was used to test bidirectional and unidirectional relationships among the variables. The empirical findings suggest that there are two co-integrating vectors during the concerned period of time in Somalia. The study found a positive relationship ofpopulation growth, external debt and GDP with unemployment and negative with, GCF and exchange rate.

Key terms: Unemployment, GCF, GDP, Exchange rate, Population growth, and External Debt.