ECONOMIC FACTORS INFLUENCING THE DYNAMICS OF UNEMPLOYMENT IN THE G10 COUNTRIES: EMPIRICAL EVIDENCE FROM PANEL DATA MODELING

Year 2017, Volume: 6 Issue: 1, 17 - 30, 30.03.2017

Oguzhan Ozcelebi , Seval Ozkan

https://doi.org/10.17261/Pressacademia.2017.382

Abstract

Purpose- The purpose of the study is to
determine which macroeconomic factors and economic policy changes may affect
unemployment in the G10 countries.

Methodology-  Panel least squares approach is employed to
estimate the role of economic factors inflencing unemployment in the G10
countries.

Findings-  Our findings are in line with the Phillips
curve approach, exposing the importance of expansionary macroeconomic policies
triggering the aggregate demand along with maintaining economic and financial
stability to reduce unemployment. Expansionary economic policies play a major
role in providing an improvement in the labor market in the long run. An
increase in the level of financial and economic integration and development may
decrease unemployment in the G10 countries. An increase in the total
value-added industry and education expenditures may lead to a decrease in the
unemployment rates in these countries.

Conclusion- We suggest that these countries should focus on
sustaining their financial stability and development to improve the conditions
of the labor market permanently. Liberalization of foreign trade, financial
flows and market capitalization are crucial factors for the development of
productivity of production factors, technology and organizational capacity in
the G10 countries. Policy makers in the G10 countries should identify the
channels through which technology, human capital, government spending, investment-specific,
foreign and other shocks and taxes affect unemployment. 

Keywords

Unemployment, G10 Countries, economic factors, panel data, panel data least squares estimation

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