The Determinants of Unemployment in Jordan: ARDL Approach

Abstract

The importance of this study is due to the fact that unemployment rates in Jordan have reached high rates, reaching 24% of the labor force in 2022, and this is due to many economic, social, demographic and political factors. Therefore, this study attempts to test the effect of some variables such as per capita GDP (PCGDP), Population growth rate (POPG), inflation rate (INF) of unemployment in Jordan for the period 2000-2022 that may affect unemployment rates in Jordan and then reach results and recommendations that may benefit political decision-makers and researchers. This study adopted the econometrics analysis approach to test the study hypotheses. The study used cointegration test, F-bounds test and ARDL model to examine the effect of unemployment determinants in Jordan. cointegration test and Fbounds test results indicated that there is a long term relationship between (PCGDP, POPG, INF) and unemployment in Jordan. ARDL long run results indicated that PCGDP has a negative and significant impact on unemployment in Jordan, while (INF) has a negative and not significant impact on unemployment. In addition, ARDL long run results indicated that POPG has a positive and significant impact on unemployment in Jordan. These results indicated that PCGDP and POPG are good determinants for unemployment rates in Jordan. The study recommends that decision makers should work to maintain high rates of economic growth to ensure a reduction in the unemployment rate in Jordan, and even to eliminate this harmful phenomenon economically and socially.