Unemployment Determinants and the Existing State of Philips curve: An Integration of Regional Heterogeneity in South Asia

Abstract

Increasing unemployment has significantly captured researcher attention in the past few decades. Although, the role of the Phillips curve in this regard has also been done, multiple times. But despite this vast scope, some factors are left untouched like the role of improved life expectancy. Similarly, each country differs from another in some manner. Hence, we tried to concentrate on economies that are demographically and geographically similar (but not the same). For this purpose, south Asian Economies are selected that are Bangladesh, India, Pakistan, and Sri Lanka. Researchers disclosed only those determinants who has proven a static role in decreasing or increasing the Unemployment rate. In this research, the impact of some socioeconomic determinants inflation, unemployment, life expectancy, and gross domestic product growth has been taken into consideration. Besides, exchange rates, foreign direct investment, and broad money are also examined. Panel data has been collected from World Development Indicators, over the time frame 1980-2020. For Statistical analysis, a multiple regression approach has been utilized, using SPSS. Results revealed that in Bangladesh, suggests that inflation, foreign investment, broad money, and GDP growth significantly while exchange rate and life expectancy are insignificantly associated with the unemployment rate. Although, in the case of only GDP growth, foreign investment, exchange rate, and broad money are statistically significant. Conversely, in Pakistan, life expectancy, inflation, GDP growth, exchange rate, and broad money has confirmed their statistical significance. While in Sri Lanka, life expectancy, GDP growth, exchange rate, and broad money significantly determine unemployment. Similarly, Panel Regression estimates revealed that life expectancy, inflation, GDP growth, exchange rate, foreign investment, and broad money significantly determines the unemployment rate.