The impact of economic factors on unemployment rates: An empirical analysis of Tanzania

This study attempted to examine the determinants of unemployment in Tanzania with effect from ۱۹۸۰ to ۲۰۲۵. Specifically, the study sought to assess the impact of gross domestic product on unemployment rate along with analyzing the impact of inflation and government expenditure on the same. The following hypotheses guided the study: firstly, GDP is negatively related to unemployment rate; secondly, inflation has negative relationship with unemployment rate; thirdly, government expenditure is negatively related to unemployment; fourthly, domestic investment has a negative impact on unemployment and lastly interest rate is negatively related to unemployment. After the unit root and cointegration tests were conducted, an Error Correction Model (ECM) was undertaken to run the variables using Engle-Granger two-step procedures. The Augmented Dickey-Fuller test was applied to test for unit root. The results show that GDP, inflation, and domestic investment were found to be statistically significant in influencing employment/unemployment in the country. Nevertheless, government expenditure was not found to explain or determine employment/unemployment. To that effect, it was a critical moment for the government to put in place an enabling environment in a way that would influence those variables/parameters that reduce unemployment to be further accelerated with a view to providing more employment opportunities in the country.

کلیدواژه ها:

employment ، Unemployment Rate ، GDP ، Inflation ، Government Expenditure