unemployment rate in namibia pdf

How much of it corresponds to the natural rate of unemployment varies over time with changing circumstances. The price of labor is taken as the real wage, which is the nominal wage divided by the price level; the symbol used to represent the real wage is the Greek letter omega, . Hence, real wages would adjust to equalize the demand and supply of labor, resulting in a natural rate of unemployment. There is an urgent need to ensure that appropriate fiscal operations are conducted and do not result in excess liquidity beyond the absorptive capacity of the economy. The duality of the labor market, combined with slow job creation and low primary-sector productivity, results in very high unemployment. Y oung Americans are enduring staggeringly high rates of joblessness. But information is costly. During that time, these new graduates will be unemployed. In a nutshell, it is evident from this study that Namibia can only address one of these macroeconomic issues, and not both of them simultaneously. BRIC . On the other hand, the currency in circulation and the real GDP help to reduce unemployment rate in both the short and the long run. In a later chapter we will explore what happens when the economy generates employment greater or less than the natural level. Each source of unemployment has quite different implications, not only for the workers it affects but also for public policy. This factor alone would raise the natural rate of unemployment. 8 (August 2003): 17. Phillips curve inflation and unemployment: An empirical research for Greece. This study is set out to investigate the impact of fiscal policy variables (capital expenditure, recurrent expenditure and direct income tax) on economic growth in Nigeria. They argue that during the recession permanent rather than temporary layoffs predominated and that it takes longer for firms to hire workers into new positions than to hire them back into former jobs. The analysis of fluctuations in the unemployment rate, and the governments responses to them, will occupy center stage in much of the remainder of this book. To achieve these objectives, the study used a Fully Bayesian (FB) spatial smoothing approach with temporal . Samuelson, P. A., & Solow R. M. (1960). Dritsaki, C. & Dritsaki, M. (2013). Therefore, the study calls upon policymakers to adopt a policy mix that can be favorably disposed towards addressing the devastating issue of unemployment, predominantly among the youth, to mitigate the adverse effects of these macroeconomic challenges. The Namibia Quarterly Economic Review is compiled by the Institute for Public Policy Research . Overall, evidence from the analyses conforms to the trade-off between inflation and unemployment postulation of the Phillips Curve (1958) with respect to the Namibian economy. Before independence, unemployment can be attributed to the war of independence, which destroyed infrastructure and caused despondence in the economy. The unemployment rate is then computed as the number of people unemployed divided by the labor forcethe sum of the number of people not working but available and looking for work plus the number of people working. Email: tsunde@nust.na. Over the past five years, the Namibian economy registered an average growth rate of 4.3 percent. Precisely, inflation contributes to macroeconomic instability (Thao & Hua, 2018), where high inflation rate leads to a reduction in social welfare while low inflation declines economic growth and job creation, which gradually result in recession and poverty escalation (Wulandari et al., 2019). 62.1. Their results show a significant trade-off relationship between the variables, validating the existence of the Phillips Curve in the economy. Define three different types of unemployment. For example, in a country with a demographic bulge of new entrants into the labor force, frictional unemployment is likely to be high, because it takes the new entrants some time to find their first jobs. Golden the US$ 3 TRILLION HEIST, CC BY-NC-ND 2.0. Namibia unemployment rate for 2019 was 19.99%, a 0.11% increase from 2018. He further accentuated the expectations theory that states that individuals expectations for economic events influence economic outcomes, giving rise to the Friedman natural rate theory, also known as the Friedman fooling theory. These results correspond to the findings of Shifotoka (2015) who observed an inverse relationship between inflation and unemployment, yet against those of Ogbokor (2005), who found the Namibian economy exhibiting stagflation. Thus, the study recommends further investigations to delve deeper into the determinants of inflation and unemployment in Namibia. Namibia - Unemployment Rate $80.00 Add To Cart % of total labor force 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 16 18 20 22 24 26 NaN% Namibia: Unemployment Rate Series Information Namibia: Labor Release Information Description This study differs from that of Ogbokor (2005); and Shifotoka (2015) in such a manner that it excluded the periods of the crises, specifically the 1973-74 and 1979-1980 of the oil shockwaves, and 2007-2008 of the financial crises, which were not considered in the study of Shifotoka (2015), as well as 2020-2021 of the COVID-19 pandemic. On the other hand, a 1% increase in direct income tax leads to a fall of 6.83% in national output. By using our site, you agree to our collection of information through the use of cookies. The act provide for the development for the National statistic system and provide for its component and objectives; to establish the Namibia Statistic Agency and the Board of the Namibia Statistics Agency and provide for their power and functions. In the model, R2 is the coefficient of determination determining the degree to which the predictor variable(s) can account for a systematic variation in the regressand variable. They may respond first by extending the hours of employees previously reduced to part-time work or by asking full-time personnel to work overtime. How Fiscal Policy Affects Non-Oil Economic Performance in Azerbaijan? Shaari, M. S., Abdullah, D. N. C., Razali, R., Luqman, M., & Saleh, A. M. (2017). Unemp = _0 + _1 Inf, where _0 is the constant while _1 represents the coefficient of the variables. The level of unemployment in Nigeria has risen persistently, increasing the risk of the non-achievement of the SDG goal 8 decent work and economic growth. Copy link Link copied. The OLS results reveal a bidirectional relationship between inflation and unemployment, validating the presence of the Phillips Curve in the Namibian economy. Figure 5.4 Computing the Unemployment Rate. The study confirmed that South Africas prices have positive effect on inflation in Namibia. What is a healthy unemployment rate in Namibia? Against this background, this study was conducted to investigate the relationship between inflation and unemployment within the context of the Phillips Curve in Namibia since independence using the data of 1991 to 2019 to validate the applicability of the Phillips Curve. Furthermore, the variables were also found to be independent of each other. Relate the natural level of employment to the natural rate of unemployment. The short-run Phillips Curve and the long-run Phillips Curve are presented in Figures 2.1a and 2.1b, respectively. Moreover, there is also a need to identify and propose policies that can help to do away with the lack of effective policy interventions. Thus, a rise in inflation above the anticipated rate will lead to a fall in the unemployment rate below the natural rate and vice-versa. If the answer is yes, the person is counted as employed. Even if the economy is operating at its natural level of employment, there will still be some unemployment. Workers may find themselves unemployed for different reasons. Moreover, the Durbin-Watson (D.W.) measures the correlation between the residuals and estimates whether autocorrelation exists in the model. (2018). The unit root tests indicate that the variables were stationary in their level forms, implying the absence of the long-run relationship. The time series properties of the variables were conducting a unit root test using mainly Central Bank of Nigeria Statistical Bulletin. A. Economic activity may be booming in one region and slumping in another. This multi-dimensional poverty index report is another milestone in directing the process of National Development Planning and adds value . Determinants of Unemployment: Characteristics and Policy Responses in Bhutan Authors: Kaewkwan Tangtipongkul Thammasat University Deki Wangmo Motithang higher secondery school Figures Figures -. People who are not working but are looking and available for work at any one time are considered unemployed. The quantity of labor demanded, Le, equals the quantity supplied. The supply curve is drawn as upward sloping, though steep, to reflect studies showing that the quantity of labor supplied at any one time is nearly fixed. Ogbokor, C. A. Estimating the US Phillips Curve: Applied time series analysis. Thus, an increase in the real wage induces a relatively small increase in the quantity of labor supplied. For firms, making decisions about the nature of new jobs is time consuming at best. Phillips, A.W. Nevertheless, Ogbokor (2005) applied the Ordinal Least Square (OLS) model to investigate the applicability of the short-run Phillips Curve in Namibia, employing time series data from various publications covering the period 1991 to 2005. Conclusion: The study concludes that an increase in money supply, capital expenditure, and controlling inflation help to increase the long-run real economic growth of Nepal. Deliberately, the study excluded the periods of 2007-2008, as well as 2020-2021, although the data were readily available to avoid misleading results based on the influences of the economic annus horribilis of the financial crisis and Coronavirus disease (COVID-19) pandemic where one variable can rise without a reduction in the other. The relation between unemployment and the rate of change of money wage rates in the United Kingdom, 1861-1957. In principle, whether unemployment rate in the country is at 51 percent, 15 percent, 10 percent or even 5 percent, it is still unemployment which denies Namibians food on their tables. In Namibia, over the past years, mapping poverty and understanding the root causes thereof has taken center stage at the course of national development through National Development Plans (NDPs). Research Leap is an international journal hosting platform for business research, management and innovation. Information in the labor market will always have a cost, and that cost creates frictional unemployment. Effects of economic uncertainty on mental health in the COVID-19 pandemic context: Social identity disturbance, job uncertainty and psychological well-being model. International Journal of Computational Economics and Econometrics, 3(1/2), 27-42. doi:10.1504/IJCEE.2013.056265. The job market is one of the strongest areas of the global economy, but this poses a challenge for central bankers, as it contributes to high inflation. This invalidates the notion of the Phillips Curve to the Greek economy. Analytical aspects of anti-inflation policy. The result of the shows that monetary rather than fiscal policy exerts a great positive impact on economic g Nigeria. The Friedman natural rate theory insinuates that the economy returns to its natural unemployment in the long run. International Journal of Economics and Finance, 5(7), 115-125. Furthermore, they argued that, due to rationality between the employers and the employees, the two parties would only be concerned about the purchasing power of money wages that is altered for inflation. Source: Economic Report of the President, 2012, Table B-42. The of - ficial unemployment rate for 16 to 24 year olds is 14.5 percent, and has been in the double-digits for seven straight . Namibia is confronted with a high ocial unemployment rate of 51.2% based on the Labour Force Survey2008, while 83.6% of the 15 to 19 years of age are unemployed. As such, even a . So, they looked at the contribution of temporary layoffs to the unemployment rate during the recent recession compared to the situation in the four recessions before 1990. In this regard, the study failed to reject the null hypotheses to imply that unemployment does not granger cause inflation and inflation does not granger cause unemployment. Similarly, Ogbokor (2005) observed the same situation within the Namibian economy. lead to a fall in the unemployment rate below the natural rate and vice-versa. Thus, they presented the Phillips Curve as a stable and exploitable relationship that plays a substantial role in inflationary policy advancement (Forder, 2010). Therefore there is a great need to look into the factors impacting this alarming high unemployment rate. From the continental perspective, Oba and Enoh (2020) conducted a study to validate the Phillips Curve in Nigeria using time series quarterly data for inflation and unemployment from 2010 to 2018, employing the Generalized Methods of Moments and Canonical Cointegration Regression methods. The pairwise granger causality indicates that causality relationship does not exist between any of the fiscal policy variables and economic growth. Similarly, Kunst (2011) used the Vector Auto Regression (VAR) model to estimate the Phillips Curve for the United States to test for a determining relationship with the Phillips curve variables, using time series quarterly data from 1949 to 2014. The literature presents various studies that investigated the Phillips Curves relevance in different countries based on macroeconomic variables. test of a unit root. The old survey, designed during the 1930s, put the Are you working? question differently depending on whether the respondent was a man or woman. His results show an inverse relationship between inflation and unemployment. Chapter 1: Economics: The Study of Choice, Chapter 2: Confronting Scarcity: Choices in Production, Chapter 4: Applications of Demand and Supply, Chapter 5: Macroeconomics: The Big Picture, Chapter 6: Measuring Total Output and Income, Chapter 7: Aggregate Demand and Aggregate Supply, Chapter 9: The Nature and Creation of Money, Chapter 10: Financial Markets and the Economy, Chapter 13: Consumptions and the Aggregate Expenditures Model, Chapter 14: Investment and Economic Activity, Chapter 15: Net Exports and International Finance, Chapter 17: A Brief History of Macroeconomic Thought and Policy, Chapter 18: Inequality, Poverty, and Discrimination, Chapter 20: Socialist Economies in Transition, Appendix B: Extensions of the Aggregate Expenditures Model, Figure 5.4 Computing the Unemployment Rate, Figure 5.5 The Natural Level of Employment, Figure 5.6 Unemployment Rate, 19602011, Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License. It also recommends a significant focus on the determinants of inflation and unemployment since the variables were found to be independent of each other. Unemployment Rate (2018) 7.20 % NCPI 4.60 % Annual GDP Growth 2.82 M Population Size 5.05 % Quarterly GDP Growth 33.40 % Unemployment Rate (2018) 7.20 % NCPI 4.60 % Annual GDP Growth 2.82 M Population Size Census of Agriculture Read more Population and Housing Census Data Read more Labour Market Data Read more DATA PORTALS Namibia SDG Portal Asides from that, Samuelson and Solow (1960) elucidated that the existing trade-off between the variables is unsustainable since the Phillips Curve has a high probability of shifting. The Phillips Curve emerged in 1958 when Alban William Phillips of the London School of Economics estimated the relationship between unemployment and the rate of change of money wages (inflation) with particular reference to the United Kingdom. The ARDL Bound testing show the existence of long-run relationship among the examined variables in both the two models, with corresponding F-statistic values of 7.62 and 6.67, respectively. Public policy responses to structural unemployment generally focus on job training and education to equip workers with the skills firms demand. However, the desire to reduce both inflation and unemployment simultaneously lies above the possibility frontier curve. The results of the OLS regression analysis are presented as follows: From the results, the coefficients of the explanatory variables constituted in equations 1 and 2 are negative and statistically significant at a 5% level of significance. [Masters thesis, University of Namibia]. The bound test is carried out to see the relationship between variables. Namibia University of Science and Technology. Abstract:This study intended to empirically validate the applicability of the Phillips Curve in Namibia since independence, using semi-annual time series data, and taking into account the periods of the annus horribilis of the global financial crises and the Coronavirus Disease pandemic. is one in which jobs are relocated from some industries to others, not reclaimed by the same industries that lost them earlier.. GDP adjusts to its long run equilibrium when there is a shock at a slow speed of 3.07%. This paper examined the impact of fiscal deficit on inflation in Namibia. Rising Unemployment in Nigeria: Public Debt to the Rescue? Efforts should be made to skew the pattern of public spending towards capital expenditure as it leads to higher growth than recurrent expenditure. The unemployment rate in Namibia remains high. Empirical results showed evidence of a long run positive effect of fiscal deficit on inflation in Namibia. Like other economies, the economic performance of Nepal is also based on these macroeconomic variables. This is a quantitative study that relied on semi-annual time series secondary data running from 1990 to 2019 were collected from the World Bank database to examine the validity of the Phillips Curve in Namibia, excluded the periods of 2007-2008 of the global financial shock, as well as 2020-2021 of COVID-19 pandemic. (2020). Statistics Agency, Windhoek, Namibia. 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Namibia unemployment rate for 2020 was 21.45%, a 1.46% increase from 2019. (2005). . 1 Johanna Pangeiko Nautwima, 2 Asa Romeo Asa. Box 2133 Windhoek, www.nsa.org.na Published 2015. The key policy implication drawn for the result is that if not contained, high negative fiscal balances could impair the monetary policy objective of price stability. DOES THE EXPORT-LED GROWTH (ELG) HYPOTHESIS HOLD FOR SERVICES EXPORTS IN NIGERIA, FISCAL OPERATIONS AND MACROECONOMIC GROWTH: THE NIGERIAN EXPERIENCE. Namibia Labour Force Survey 2014 Report. Each variable is independent of the other, and, Two-way causality between inflation and unemployment. When the labor market is in equilibrium, employment is at the natural level and the unemployment rate equals the natural rate of unemployment. It will take time for unemployed workers to relocate and find new jobs. Precisely, a unit increment in the inflation rate is associated with a reduction of 14% in the unemployment rate. Even if employment is at the natural level, the economy will experience frictional and structural unemployment. Inclusively, the ideology of all economists covered in the literature presented in this study conclude that the trade-off of the Phillips Curve is only applicable in the short run but not in the long run, and different Phillips Curves vary with the rate of inflation since fluctuations in inflation expectations have the potential to shift the Phillips Curve. Therefore, the economy of Bangladesh exhibits stagflation. If the answer is no, the surveyor asks if that person has looked for work at some time during the previous four weeks and is available for work at the time of the survey. Those who have jobs are counted as employed; those who do not have jobs but are looking for them and are available for work are counted as unemployed; and those who are not working and are not looking for work are not counted as members of the labor force. Their analysis revealed that during the recession of the early 1980s, job losses were about evenly split between cyclical and structural changes. Students cannot predict precisely how many jobs there will be in a particular category when they graduate, and they are not likely to know how many of their fellow students are training for these jobs. A monthly survey of households divides the civilian adult population into three groups. Relate the natural level of employment to the natural rate of unemployment. (2010). Failure to fully employ these factors leads to a solution inside the production possibilities curve in which society is not achieving the output it is capable of producing. Instead, he underscored the existence of two Phillips Curves, a short-run Phillips Curve, and a long-run Phillips Curve, justifying that the trade-off is temporally in essence that it only exists in the short run and not in the long run. But a unidirectional causation between total government expenditure and broad money supply. The study also found a unidirectional causality running from fiscal deficit to inflation in Namibia. Following a time of . This page provides values for Youth Unemployment Rate reported in several countries. International Finance and Banking, 3(1), 77-96. In addition, the study sought to determine whether the relationship between inflation and unemployment is short-run or long-run, and finally establish the causal relationship between the variables using various econometric analyses. Unlike the short-run Phillips Curve, the long-run Phillips Curve holds only the anticipated unemployment rate constant and not for inflation, showing the nexus between the variables when the actual unemployment rate is equivalent to the expected inflation rate. However, various macroeconomists led by Friedman (1968) challenged the notion of the Phillips Curve, arguing that it has a potential to shift over time, making it only applicable in the short run, unlike in the long run. An economy at its natural level of employment will therefore have frictional and structural unemployment. Namibia Statistics Agency (2015): Analysis of Youth Employment and Unemployment in Namibia 2012-2013. Whereas, no co-integration between government spending on education and gross enrolment rate at primary and secondary level is observed. The paper employed Autoregressive Distributed Lag Model (ARDL) and Granger causality approach using quarterly data for the period 2002 - 2017. Their results show a negative relationship between inflation and unemployment rates in both the short and long run, validating the notion of the Phillips Curve in high-income countries.

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