Understanding the Factors Affecting the Unemployment Rate Through Regression Analysis

4333 WordsDec 4, 201218 Pages
Understanding the Factors Affecting The Unemployment Rate Through Regression Analysis An Individual Report Presented to The Faculty of Economics Department In Partial Fulfillment To The Requirements for ECONMET C31 Submitted to: Dr. Cesar Rufino Submitted by: Aaron John Dee 10933557 April 8, 2011 1 TABLE OF CONTENTS I. INTRODUCTION A. Background of the Study B. Statement of the Problem C. Objective II. THEORETICAL FRAMEWORK AND RELATED LITERATURE A. GDP B. Average Years in School C. Population D. Literacy Rate III. OPERATIONAL FRAMEWORK A. Model Specification B. List and Description of Variables C. A-priori Expectations IV. METHODOLOGY V. EMPIRICAL RESULTS AND INTERPRETATIONS A. Regression of the Original Model 4 4…show more content…
The higher the GDP the higher is the country’s standards of living and the lower the GDP the lower is the country’s standard of living. According to (Abuqamar, Coomans, & Louckx, 2011), unemployment is an important factor in measuring country’s economic strength like GDP per capita. If the unemployment level is high, then economic growth is very low because they have a negative relationship. A sustainable growth accompanied by macroeconomic policies that promotes employment will eventually cut down the level of unemployment in the economy and growth is considered as a solution to decrease unemployment (Hussain, Siddiqi, & Iqbal, 2010). This is true because when government wants to increase output by building infrastructures and the like. They create job opportunities for those who are unemployed thus, alleviating unemployment in the economy. More people will get jobs and earn to sustain their standard of living or even increase their standard of living depending on their salaries. B. Average Years in School Education is very important in everyone’s lives. It is our foundation of knowledge which will reflect us. Even though going to school and doing homework are boring, we will still benefit from it because we learn and by learning we become mature and responsible. According to (Weisberg & Meltz), the higher the level of education or the years in school of a person, the 6 lower will be the
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