An Assessment of Association between Natural Resources Agglomeration and Unemployment in Pakistan

Ali, Amjad and Zulfiqar, Kalsoom (2018): An Assessment of Association between Natural Resources Agglomeration and Unemployment in Pakistan. Forthcoming in:

Abstract

Mostly, economists believe that due to non-existence of agglomeration economies, there are less chances of employment spatial distribution in an economy. Following the strands of previous literature about agglomeration special impacts, this study has uplifted the curtain from some interesting realities. This study has examined the association between unemployment and natural resources agglomeration in Pakistan from 1980 to 2016. For measuring natural resources agglomeration, an index has been constructed based on coal production, oil production, forest area and agricultural land as a percentage of total land area. The study utilized autoregressive distributed lag (ARDL) method of co-integration. The results show that natural resources agglomeration, secondary school enrollment, foreign direct investment and inflation have a negative and significant impact on unemployment in Pakistan. The results reveal that population is putting a positive impact on unemployment in Pakistan. The study finds that natural resources agglomeration is an important factor for reducing unemployment in Pakistan. There are some other factors for agglomeration economies, i.e. Local economic policies, natural resources availability and amount of manpower for employment spatial distribution in Pakistan. So, efforts are needed to mega scale for exploration, proper usage and the functioning of natural resources in Pakistan.

• Item Type: MPRA Paper
• Language: English
• Keywords: unemployment, natural resources, inflation, foreign direct investment
• Subjects: 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; N - Economic History > N5 - Agriculture, Natural Resources, Environment, and Extractive Industries > N50 - General, International, or Comparative; P - Economic Systems > P2 - Socialist Systems and Transitional Economies > P24 - National Income, Product, and Expenditure ; Money ; Inflation

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