(An) empirical analysis of the relationship between unemployment and GDP in Egypt

Abstract

The deteriorating economic situation, especially involving unemployment and marginalization of young people, is one of the most common and important reasons for the Egyptian revolts in 2011 and 2013.Many economies suffer from the exacerbated problem of unemployment both quantitatively and qualitatively. Therefore this problem has been attracting the attention of decision-makers, and policy-makers, economists, researchers. This study shows the relationship between the unemployment and GDP in Egypt. Accordingly, the phenomenon of unemployment in Egypt has become a problem that has economic and social dimensions, and clearly reflects the inability of the economic structure, and the imbalance in economic policy. Unemployment leads to a lot of significant social impacts

it destroys the economy in terms of human capacity and dissipates growth opportunities. Finally, through the study of the validity of Okun’s law in Egypt, the result is, the relationship between unemployment and the rate of economic growth in Egypt is inverse and it is significant, with Okun‘s coefficient (beta = -o.42).It has a negative signal to reflect the inverse relationship between the two variables under study. Thus, the policy-makers and decision-makers in Egypt must work with utmost energy, to increase economic growth rates, to ensure high employment rates.