Analysis of the relationship between the unemployment rate and the contribution of the productive sectors to GDP in Sudan: using ARDL

Abstract

The study aims to examine the relationship between the unemployment rate and the contribution of the productive sectors to gross domestic product (GDP) in Sudan. It is assumed that there is statistically significant relationship between the unemployment rate and the contribution of the agricultural, industrial and service sectors in the GDP. The variables were subjected to several econometrics tests, such as Augmented Dickey–Fuller test (ADF), Autoregressive Distributed- lagged (ARDL) and the Error Correction Model (ECM) to test the short- and long- term relationship between study variables.

The results of the descriptive analysis indicate that the average of unemployment rate is (17.7%) exceeds the average growth rate (4.9%) more than three times. While the results of the econometrics tests, including Augmented Dickey–Fuller, confirmed that the time series of the contribution of the agricultural and the industrial sectors are integrated from the degree one, while the time series of the unemployment rate is stationary at the level. The bounds test for co- integration within the Autoregressive Distributed- lagged methodology results provided evidence of a long- run equilibrium relationship between the unemployment rate and the share of productive sectors in GDP. While the estimation results of the long- run parameters of the ARDL the model showed a negative correlation between the unemployment rate and the share of the industrial sectors in the gross domestic product, with a time lag of (4) time periods. While the results of the error correction model confirmed that the unemployment rate is adjusted to its equilibrium value in each time period by 4.4% of the remaining balance of the period with onetime lag.

 According to the results, the study recommended restructuring the productive sectors of the Sudanese economy, increasing the investments directed towards them, developing them, raising their efficiency, absorptive and operational capacity through multiple strategies that seek to increase employment opportunities. In addition to improve the efficiency of Sudanese labor through the development of educational curricula, training programs and professional to improve the efficiency of the supply of labor and increasing the demand for them in a way that absorbs the increasing numbers in the workforce. In addition to adopts strategies that focus on transformational training in line with current and future markets need.