An Econometric Analysis of Unemployment's Impact on Economic Development in Algeria: A Vector Autoregression Approach (1980-2024)

Abstract

This study examines the dynamic relationship between unemployment and economic development in Algeria over a 45year period spanning from 1980 to 2024. Employing the Vector Autoregression (VAR) methodology, we analyze annual time series data sourced from the World Bank database to investigate both the magnitude and direction of causality between these two macroeconomic variables. Our findings reveal a statistically significant negative effect of unemployment on economic development, with Granger causality tests confirming a unidirectional causal relationship running from unemployment to economic development.