The unemployment rate and its determinants: the Malaysian case

Ghafar, Aiman and Masih, Mansur (2017): The unemployment rate and its determinants: the Malaysian case.

Abstract

The focus of this paper is on the determinants of unemployment rate. Malaysia is used as a case study. The standard time series techniques are used for the analysis. The variables are bound together by theoretical relation as evidenced in their being cointegrated. Based on the variance decomposition analysis, the unemployment rate is driven mostly by inflation rate followed by the growth of population and private consumption expenditures. The results are consistent with the well-known ‘Phillips curve’ (Phillips,1958). The results are plausible and contain strong policy implications for the emerging countries like Malaysia.

• Item Type: MPRA Paper
• Language: English
• Keywords: Determinants of unemployment rate, VECM, VDC, Malaysia
• Subjects: C - Mathematical and Quantitative Methods > C2 - Single Equation Models ; Single Variables > C22 - Time-Series Models ; Dynamic Quantile Regressions ; Dynamic Treatment Effect Models ; Diffusion Processes; C - Mathematical and Quantitative Methods > C5 - Econometric Modeling > C58 - Financial Econometrics; E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy > E24 - Employment ; Unemployment ; Wages ; Intergenerational Income Distribution ; Aggregate Human Capital ; Aggregate Labor Productivity

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