Economic Growth

Topics: Economics, Jordan, Arab League Pages: 14 (4979 words) Published: July 2, 2013
World Applied Sciences Journal 18 (5): 673-680, 2012 ISSN 1818-4952 © IDOSI Publications, 2012 DOI: 10.5829/idosi.wasj.2012.18.05.16712

The Relationship Between Unemployment and Economic Growth in Jordan and Some Arab Countries Mahmoud A. Al-Habees and Mohammed Abu Rumman Faculty of Planning and Management, AL-Balqa Applied University, Jordan Abstract: Unemployment is a negative phenomenon in any human society as it adversely affect in different dimensions and directions. In addition, it refers to an economic defect affecting the community structure. Thus, the economic and social dimensions of unemployment increase complexity, consequently lead us to adopt several analyses to understand its nature and impact on the growth. The effects are verified by the presence of causal relation between rates of economic growth and the changing rates of unemployment prevailing in the economy. However, the theoretical analysis does not always confirm this relationship as it focuses on unemployment as economical phenomenon resulting from imbalance in the economic policies of a certain country. The theoretical analysis of unemployment reveals the size of labor employment as a human force associated with the extent of success factors related to economic growth. The present study focused on the relationships between economic growth and change of unemployment rates in some Arab countries with detailed analysis for the case in Jordan. The effectiveness of economic policies aimed at reducing unemployment rates in those countries with average rates of economic growth. Key words: Unemployment Economic growth Jordan economy constructing investment programs. So, unemployment is a global phenomenon with the economic and social effects. All countries including developing ones confront this phenomenon; these states move slowly in economic growth whereas affected by population growth with a pattern and shape of the population pyramid, revealing a high rate of dependency [2] and causing the high economic and social cost of unemployment and its relationship to economic growth. Therefore, unemployment is defined as a situation in which the community does not use work force fully [3]. Economic growth is a continuous and integrated process of interaction within interrelations working to increase the production capacity of the national economy continuously, for the long-run, to raise real national income as well as the level of real per capita income [4,5]. It should be noted that the size of the labor force employed in the economy is part of the yearly gross national product [6]. In addition, it has to quantify the impact of factors affecting economic growth by using a model of economic growth in which work plays an active role in determining the level of economic growth [7,8].

INTRODUCTION Unemployment is a multi-dimensional phenomenon; it is an economic phenomenon showing imbalance in economic activity. Moreover, it is also considered social phenomenon because of its effects on the social structure of societies. The two economic and social dimensions of the unemployment increase its complexity and impose adopting extensive analysis to understand the causes and consequences and to identify the responses to such phenomenon. The economic growth is a goal of the main objectives of economic policy either of monetary or of fiscal policy. The investment leads to achieving rate of sustained economic growth in the national economy and addressing the problem of unemployment. The greater the unemployment rate; the less opportunities to achieve high economic growth as well as the emergence of the negative social aspects [1]. The most important priority of economic policies tends to increase the growth so as to reflect positively on reducing levels of unemployment and, thus, link it with the impact of policies investment to create more jobs by

Corresponding Author: Dr. Mahmoud A. Al-Habees, Faculty of Planning and Management, AL-Balqa Applied University,...
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