Unemployment and youth unemployment in OECD countries - Some empirical evidence

This study seeks to investigate how crucial macroeconomic variables affect total and youth unemployment in the OECD countries from the period 1999 to 2019. Rising unemployment has been a major concerned for developed countries as it reduce the role of human capital in the economy. This study developed a panel data model which relate unemployment as a function of GDP growth, inflation, trade openness, foreign direct investment, remittance and a vector of control variabes such as average wage rate and capital investment for robustness of our model. The result shows that an increase in GDP growth, Inflation, Average wage employment, capital investment and remittances have a very significant effects in reducing unemployment level in the OECD countries While average wage employment is found to have a very low impact in reducing unemployment in these countries during the period of studies while foreign direct investment has a strong effect in increasing unemployment in these OECD countries. Trade openness is found to have no significant in increasing unemployment in these countries during the period of studies. Moreover, the study also found that all these selected macroeconomic variables to have more impact on youth unemployment during the period of studies. Therefore, to achieve a low level of unemployment in the OECD countries, these macroeconomics variables are fundamental in tackling unemployment level in the OECD countries