Macroeconomic determinants of unemployment in the CPLP Countries (1992-2022)
Macroeconomic Determinants of Unemployment in the CPLP Countries (1992-2022)
Keywords:
Unemployment rates, panel data, ordinary least squares, fixed effects, random effectsAbstract
We used the panel data technique to analyze the effects of the macroeconomic determinants of unemployment in the CPLP countries, from 1992 to 2022, in 8 CPLP countries, namely: Angola, Cape Verde, Equatorial Guinea, Guinea-Bissau, Mozambique, Brazil, Portugal and East Timor. São Tomé and Príncipe was excluded from the study due to lack of data. In the model, the dependent variable is the unemployment rate (measured in %) and the independent variables are the growth rate of real GDP, inflation, tax on goods and services, military spending, external debt and the growth rate of manufacturing value added. We estimated static Ordinary Least Squares (OLS), Fixed Effects (FE) and Random Effects (RE) models. The results suggest an inverse relationship between unemployment rates and inflation (Phillips curve) in the CPLP countries. In addition, it was also found that there is a negative relationship between unemployment rates and the GDP growth rate, thus verifying OKUN's law at the level of these countries.
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