Globalization and Unemployment: Empirical Evidence from West African Sub-Region

International Journal of Economics and Management Studies

© 2020 by SSRG - IJEMS Journal

Volume 7 Issue 10

Year of Publication : 2020

Authors : Ubong Edem EFFIONG, Blessing UDOFIA, Joel Isaac OKON

10.14445/23939125/IJEMS-V7I10P103

How to Cite?

Ubong Edem EFFIONG, Blessing UDOFIA, Joel Isaac OKON, "Globalization and Unemployment: Empirical Evidence from West African Sub-Region," SSRG International Journal of Economics and Management Studies, vol. 7,  no. 10, pp. 13-21, 2020. Crossref, https://doi.org/10.14445/23939125/IJEMS-V7I10P103

Abstract:

This paper investigated the effect of globalization on unemployment in West Africa between 1991-2017. Data were obtained from the World Bank, and the index of globalization was the KOF Globalization Index. Unemployment was defined as a function of globalization (overall, economic, political, and social) and inflation. The study employed a unit root test, Fisher cointegration test, error correction mechanism, and Dumitrescu-Hurlin Granger causality test. The unit root test revealed that the variables were integrated of order I(0) and I(1) and the cointegration test presented evidence of a long-run relationship. Findings from the VECM revealed that globalization leads to an insignificant decrease in unemployment in the short run but will lead to a significant increase in the long run. It was also discovered that economic globalization reduces unemployment significantly in the short run. The Dumitrescu-Hurlin test revealed that there is no causality between political globalization and unemployment, while economic and social globalization exhibited a bidirectional causality with unemployment. The paper concludes by stating that the economic dimension of globalization should be encouraged as it will help in reducing unemployment in the region in the short run.

Keywords:

Globalization, Unemployment, West Africa, Cointegration, Panel Data, VECM.

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