Factors Impacting Unemployment Rates in South Asian Developing Nations. A Panel ARDL Approach Utilizing the Pedroni Cointegration Method

This paper has been created to pin point the key economic elements influencing the unemployment rate in developing nations of South Asia. Bangladesh, India, and Pakistan have been selected as the focus countries for this study. The research aims to illustrate the impact of GDP growth rate, population growth, inflation, FDI inflow, and industrial value addition on unemployment in these developing nations. Data has been gathered from the World Bank database, ranging from 1991 to 2024. The panel unit root tests (LLC and IPS) confirmed the stationarity of all variables in their first-difference values. The findings from the Pedroni residual cointegration test indicated that the series demonstrates cointegration and that long-term equilibrium relationships exist among the variables. Results from the panel ARDL analysis show that FDI inflow, inflation, and industrial value added contribute to a reduction whereas GDP growth and population growth both contribute to the rise in unemployment. Conversely, the short-run coefficients suggest that all variables, except for industrial value addition, are inversely related to the unemployment rate in these nations. The research concludes with recommendations for appropriate policy measures necessary to maintain low and stable unemployment rates