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Research Article

EEO. 2021; 20(5): 3942-3952

Investigating the Relationship between Youth Unemployment and Macroeconomic Policies in Pakistan

Khadija Malik Bari, Muhammad NadeemSarwar*, Shamrez Ali, Muhammad Musa Kaleem.


Pakistan is considered to be the fifth-largest young country in the world and the 28.45 percent population of the country comprises youth agedbetween 15 and 29 which is the officially defined bracket for youth in Pakistan. The most prominent challenge faced by the youth of Pakistan is difficulty to find a job and a long unemployment spell because of lack of field experience and skills due to the low quality of education and lack of required education. Therefore, the role of government has been increased intensively to impose such type of economic policies that may generate employment opportunities for them. Thus, the current research investigates the relationship between macroeconomic variables, which represent monetary, fiscal, and trade policy, and youth unemployment in Pakistan. In the light of the results of the unit root test, this research applied the ARDL bounds test which confirms that a long relationship exists between macroeconomic variables and youth unemployment. Moreover, trade liberalization, money supply, budget deficit, and investment are significant sources of reduction in youth unemployment in the short run. But in the long run, only investment and budget deficit have a significant role in the reduction of youth unemployment for the case of Pakistan. These results provide important implications to the policymakers of Pakistan for short-run and long-run policymaking.

Key words: Youth Unemployment, Macroeconomic, Policies, Pakistan

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