THE IMPACT OF ECONOMIC GROWTH ON UNEMPLOYMENT IN CENTRAL ASIA
DOI:
https://doi.org/10.5281/zenodo.17757091Keywords:
Economic Growth, Unemployment, Central Asia, Okun's Law, Panel Data Analysis, P-ARDL, Jobless Growth, Labor Market Dynamics, Transition Economies.Abstract
This study investigates the dynamic relationship between economic growth (measured by real GDP growth) and
unemployment across the five Central Asian economies—Kazakhstan, the Kyrgyz Republic, Tajikistan, Turkmenistan,
and Uzbekistan—over the period 2000–2023. The region’s transition economies offer a unique context where rapid
economic development, often driven by commodity exports and foreign direct investment, does not consistently translate
into proportional job creation, reflecting deviations from Okun’s Law. Using panel data techniques, including the Panel
Autoregressive Distributed Lag (P-ARDL) model and the Vector Error Correction Model (VECM), the research estimates
short-run and long-run elasticities between economic growth and unemployment. Findings reveal significant heterogeneity
across countries. A statistically significant negative long-run relationship is confirmed, indicating that a 1% increase in
GDP growth is associated with a decline in unemployment; however, the magnitude varies due to differences in economic
structure. Short-run estimates reveal substantial variation, suggesting labor market rigidities and mismatches between
labor supply and demand. Countries dependent on extractive industries display weaker job elasticity, resulting in “jobless
growth.” This study contributes to the empirical literature by offering updated, region-specific evidence that can assist
policymakers in promoting more inclusive and employment-rich growth through economic diversification and investment
in human capital.
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