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Economic Growth and Unemployment Rate:An Empirical Study of Indian Economy


Affiliations
1 Asia Pacific Institute of Information Technology SD India, Panipat, Haryana, India
2 International Institute of Management Studies, Pune, Maharashtra, India
 

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Unemployment has been a major problem for India from a long time. The problem of unemployment is a global phenomenon, with international bodies like ILO predicting the rise in unemployment in India in coming years. The study attempts to find out the effect of economic growth on unemployment rate in India. Gross Domestic Product has been considered as an indicator of economic growth for the study. The data regarding GDP and unemployment rate have been collected from secondary sources like WorldBank database. Correlation and Regression analysis have been used to study the nature and degree of effect of economic growth on unemployment rate. It has been found that there is a strong negative correlation between economic growth and unemployment rate. Also, it was found that GDP accounts for 48% of cause of change in unemployment rate. The findings are in line with the Okun’s law and the conclusions of studies conducted in the past.

Keywords

Unemployment, Gross Domestic Product, Okun’s Law.
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  • Economic Growth and Unemployment Rate:An Empirical Study of Indian Economy

Abstract Views: 1268  |  PDF Views: 718

Authors

Khem Chand
Asia Pacific Institute of Information Technology SD India, Panipat, Haryana, India
Rajesh Tiwari
International Institute of Management Studies, Pune, Maharashtra, India
Manish Phuyal
Asia Pacific Institute of Information Technology SD India, Panipat, Haryana, India

Abstract


Unemployment has been a major problem for India from a long time. The problem of unemployment is a global phenomenon, with international bodies like ILO predicting the rise in unemployment in India in coming years. The study attempts to find out the effect of economic growth on unemployment rate in India. Gross Domestic Product has been considered as an indicator of economic growth for the study. The data regarding GDP and unemployment rate have been collected from secondary sources like WorldBank database. Correlation and Regression analysis have been used to study the nature and degree of effect of economic growth on unemployment rate. It has been found that there is a strong negative correlation between economic growth and unemployment rate. Also, it was found that GDP accounts for 48% of cause of change in unemployment rate. The findings are in line with the Okun’s law and the conclusions of studies conducted in the past.

Keywords


Unemployment, Gross Domestic Product, Okun’s Law.

References





DOI: https://doi.org/10.17492/pragati.v4i02.11468