An Analysis of Causal Relationship between Economic Growth and Unemployment: Evidence from Pakistan


  • Fouzia Yasmin
  • Ruqia Shaheen
  • Adnan Yasin
  • Sohail Naseer Mphil Scholar, Department of Management Sciences, Air University School of Management, Air University Islamabad, Pakistan.



Unemployment, GDP Growth, Stationarity, Long run and Short Run Relationship


Economic prosperity of any nation relies on the economic progress. The most significant indicator for economic progress is employment generation and it has a negative impact on the overall economy. When there is increase in the employment opportunities overall economic productivity increases as there increase the level of living. Unemployment is also related with poverty. High level of unemployment causes increase in the level of poverty. This research used the data for 1976 to 2017 from various secondary sources. After examining the nature of the time series the by using the ADF (Augmented Dickey Fuller) test the ARDL model was used for the analysis. The results illustrate the inverse impact of unemployment on the economic performance in the country. Increase in labor supply which causes to increase in unemployment the study concluded that enhanced economic activities as increase in employment opportunities which leads to increase in overall economic wellbeing