Studying the relationship between economic growth and unemployment according to Okun's Law in Egypt during the period (1990-2023

نوع المستند : المقالة الأصلية

المؤلفون

1 قسم الاقتصاد كلية التجارة ـ جامعة المنصورة

2 كلية التجارة ـ جامعة العريش

المستخلص

Abstract: The study critically investigates the influence of unemployment on Egypt's economic growth using time series data from 1990 to 2023. The relationship between unemployment and economic growth was found to be adverse, indicating that reducing unemployment would ensure Egyptian economic growth. The effects of Okun's law coefficient suggest a negative association between unemployment and GDP, since low economic growth is one of the reasons for the rise in unemployment. As the decrease in aggregate demand triggers a decline in aggregate supply, a decrease in production leads to a decrease in economic growth rates. Thus, companies cut staff, which raises unemployment, exacerbating long-run unemployment issues. In summary, the study's findings support Okun's law, as they prove that growing GDP decreases unemployment in Egypt. Based on the findings.
The results of the model tests showed that there is no direct relationship between GDP growth as an independent variable and the growth of the unemployment rate as a dependent variable, but there is a relationship between the difference at level and the influence factor by approximately (-0.386), with a significance level of 5%, meaning that an increase in the growth rate of output by 1% leads to a decrease in the unemployment rate by (-0.386%). In a later period, hold other factors constant. which is in line with Okun’s law, but this relationship is only in the short run, while the existence of a long-run integration relationship between the two variables has not been proven.

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