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Unemployment in Developed and Developing Countries

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Unemployment in Developed and Developing Countries

Page 1 of 14
Introduction
Attaining a full employment level, where only a natural level of unemployment exists, is one important macroeconomic objective and they key to this attaining this objective is job creation. This report is a cross sectional econometric analysis of how different factors lead to the creation of jobs in countries with differing Gross National Income per capita. When speaking of job creation, one can expect that the impact and the significant importance of a factor, such as growth rate of the agriculture sector, would vary across developing and developed nations. In nations with high national income the agriculture sector is highly capital intensive and higher growth rates in production are achieved through improvements in crop yield. In such countries we can expect that there would not be a significant relationship between employment and growth of agriculture. However in low income countries, farmers are unable to afford expensive technology, such as hybrid seeds, expensive machinery, etc. Therefore the agriculture sector is largely labor intensive in these countries and therefore we can expect a relationship between growth rate of agriculture and employment in these countries. In this report we look at 5 such factors that may have a different impact on employment among countries of different income groups. Objective

The objective of this report is to find out which factors have a significant impact on employment in low income and high income countries. Also, I have aimed to show that these independent variables have a significantly different impact on employment across countries with different Gross National Income. The Dependent and Independent Variables

The dependent variable taken in this report, as a proxy for employment, is the employment to population ratio. Specifically we will be looking at how different factors lead to changes in the percentage of people employed (above 15 years of age) across different countries. When looking at factors of...