The Economic Growth effects on unemployment in Algeria according to "Okun" and "Gordon" models using the ARDL model

Abstract

Through this paper, we aim to measure the impact of economic growth on unemployment, in the short and long term in the Algerian economy during the period 1970-2017. To achieve this objective, the Okun relationship was applied, and then the Okun relationship developed by Gordon was estimated, relying on ARDL model methodology in the estimation with the aim of estimating short- and long-term elasticities;  The most important results of this study were: - The effects of the change in output growth on unemployment are not immediate, in the sense that the GDP growth rate in period (t) does not affect the rate of unemployment growth in the same period in the two models, but it's highly influential in late-time periods. - There is a negative and significant  effect  of GDP growth rates on unemployment in both models and in the long and short term, Where we found that the elasticity of unemployment relative to output growth is estimated at -0.73% in the first model, and -0.44 points in the second model. Finally, through this study, we found some areas of weakness in the national economy, so we offer some recommendations, the most important of which are: The need to provide an integrated database on unemployment that takes into account  international definitions and measurements; Implement serious policies that achieve a sustainable economic growth; Attention to the productive and social services sectors that are most absorbing labor,  The necessity of adopting the principle of future planning for employment.