Examining the Effects of Unemployment on Economic Growth in Sri Lanka (1991-2017)

Abstract

Economic growth of a country can be considered as a major requirement to reduce unemployment. This paper has investigated the relationship between growth and unemployment for the period of 1991-2017 in Sri Lanka through the implementation of Okun’s law, using ARDL Bound test approach. The empirical results confirmed existence of Okun’s Law which is negative relationship between unemployment and economic growth in Sri Lanka. Thus, it can be concluded that the lack of economic growth explain the unemployment problem in Sri Lanka

Keywords: ARDL Bound test, GDP, Okun’s Law, Unemployment

DOI: 10.7176/JESD/10-20-04

Publication date:October 31^st 2019