Abstract
The objective of this study is to investigate the influence of foreign direct investment, economic growth, international trade, Covid-19 pandemic on unemployment rates in six developing Middle Eastern and North African (MENA) countries, as well as members of the Organization of Islamic Cooperation (OIC), over period 2010 to 2021. Quantitative approaches using panel regression fixed effect model are utilized. According to the findings of this study, all of the variable used include foreign direct investment, economic growth, international trade and the Covid-19 pandemic simultaneously have a substantial impact on unemployment rate in six MENA countries. While partially, foreign direct investment, economic growth and international trade have a strong influence in declining unemployment in six MENA countries, while the Covid-19 pandemic variable has a positive relation and insignificant effect on the unemployment rate which indicates that statistically there is no significant difference of the unemployment rate in the years before and during Covid-19 pandemic. In conclusion, since the MENA countries has experienced a high concentration of unemployment particularly among youth for a long time, the government ought to concentrate more on facilitating skills training support for young people. This will ensure that the young people have added value and are qualified in the sectors and fields offered, particularly in foreign direct investment, allowing the FDI to absorb domestic workers. The youth can so, collectively, escape unemployment and enhance productivity in a country, which will also raise the GDP of the countryReferences
Aktar, I., & Ozturk, L. (2009). Can unemployment be cured by economic growth and foreign direct investment in TURKEY? International Research Journal of Finance and Economics, 1(27), 203-211.
Alalawneh, M., & Nessa, A. (2020). The impact of foreign direct investment on unemployment: Panel data approach. Emerging Science Journal, 4(4), 228-242. https://doi.org/10.28991/esj-2020-01226
Alhdiy, F. M., Johari, F., Daud, S. N. M., & Rahman, A. A. (2015). Short and long term relationship between economic growth and unemployment in Egypt: An empirical analysis. Mediterranean Journal of Social Sciences, 6(4S3), 454-462. https://doi.org/10.5901/mjss.2015.v6n4s3p454
Andrei, D., Vasile, D., & Adrian, E. (2019). The correlation between unemployment and real GDP growth. A study case on Romania. Analele Universităţii Din Oradea, 316.
Department of United nations. (2022). Middle East and North Africa: addressing highest rates of youth unemployment in the world. UN News Global Perspective Human Stories.
Dikko Alrakhman, Susetyo, D., Taufiq, & Azwardi. (2022). Effect of Economic Growth on the Unemployment Rate: Okun's Legal Analysis. Budapest International Research and Critics Institute-Journal (BIRCI-Journal), 5(2), 10132-10141. https://journal.binus.ac.id/index.php/winners/article/view/639
Dornbusch, R., Fischer, S., & Startz, R. (2011). Macroeconomics. McGraw-Hill.
ElBehairy, H., Hendy, R., & Yassin, S. (2022). The Impact of Covid-19 on MENA Labor Markets: A Gendered Analysis from Egypt, Tunisia, Morocco and Jordan (ERF Working Papers Series, Issue 1559).
Farayibi, A., & Asongu, S. (2020). The Economic Consequences of the COVID-19 Pandemic in Nigeria. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.3637668
Farsio, F., & Quade, S. (2003). An Empirical Analysis of the Relationship Between GDP and Unemployment. Humanomics, 19(3), 1-6. https://doi.org/10.1108/eb018884
Febryastuti, R. (2019). Pengaruh Keterbukaan Perdagangan Internasional dan Pertumbuhan Ekonomi Terhadap Pengangguran di ASEAN-5, 1996-2017. Journal of Economics Development Issues, 2(01), 19-25. https://doi.org/10.33005/jedi.v2i01.23
Felbermayr, G., Prat, J., & Schmerer, H. J. (2011). Trade and unemployment: What do the data say? European Economic Review, 55(6), 741-758. https://doi.org/10.1016/j.euroecorev.2011.02.003
Jin, C., Lee, S., & Hwang, J. (2019). The impact of import and export on unemployment: A cross-national analysis. International Journal of Sustainable Economy, 11(4), 347-363. https://doi.org/10.1504/IJSE.2019.103475
Johnny, N., Timipere, E. T., & Krokeme, O. (2018). Impact of Foreign Direct Investment on Unemployment rate in Nigeria (1980-2015). International Journal of Academic Research in Business and Social Sciences, 8(3). https://doi.org/10.6007/ijarbss/v8-i3/3905
Kelly, B. D. (2020). Plagues, pandemics and epidemics in Irish history prior to COVID-19 (coronavirus): What can we learn? Irish Journal of Psychological Medicine, 37(4), 269-274. https://doi.org/10.1017/ipm.2020.25
Kim, J. (2011). The Effects of Trade on Unemployment: Evidence from 20 OECD countries. Stockholm University, Department of Economics Research Papers, 19.
Krafft, C., Omar, I., Assaad, R., Cheung, R., & LaPlante, A. (2022). Employment in MENA during the pandemic: persistent inequality. Economic Research Forum. https://theforum.erf.org.eg/2022/08/15/employment-mena-pandemic-persistent-inequality/
Kukaj, H., Nimani, A., & Usaj, V. (2022). Foreign Direct Investment, Economic Growth, and Unemployment: Evidence From Developing Countries. Journal of Governance and Regulation, 11(2 Special issue), 293-300. https://doi.org/10.22495/jgrv11i2siart8
Magdalena, S., & Suhatman, R. (2020). The Effect of Government Expenditures, Domestic Invesment, Foreign Invesment to the Economic Growth of Primary Sector in Central Kalimantan. Budapest International Research and Critics Institute (BIRCI-Journal): Humanities and Social Sciences, 3(3), 1692-1703. https://doi.org/10.33258/birci.v3i3.1101
Marzan, M. H., Xiaohua, C., Sarker, M. M., & Akter, S. (2020). The impact of International Trade on GDP: Evidence from Belarus. International Journal of Economics and Management Studies, 7(3), 143-151. https://doi.org/10.14445/23939125/ijems-v7i3p119
Mehmet Mucuk, M. T. D. (2013). the Effect of Foreign Direct Investments on Unemployment : Journal of Business, Economics & Finance, 2(3), 53-66.
Muhd Irpan, H., Mat Saad, R., Shaari Md Nor, A. H., Md Noor, A. H., & Ibrahim, N. (2016). Impact of Foreign Direct Investment on the Unemployment Rate in Malaysia. Journal of Physics: Conference Series, 710(1). https://doi.org/10.1088/1742-6596/710/1/012028
Nwaka, I. D., Uma, K. E., & Tuna, G. (2015). Trade openness and unemployment: Empirical evidence for Nigeria. Economic and Labour Relations Review, 26(1), 117-136. https://doi.org/10.1177/1035304615571225
OECD. (2020a). Covid-19 Crisis Response in MENA Countries. Organisation for Economic Co-Operation and Development OECD, June, 1-32. http://www.oecd.org/coronavirus/policy-responses/covid-19-crisis-response-in-mena-countries-4b366396/%0Ahttps://read.oecd-ilibrary.org/view/?ref=129_129919-4li7bq8asv&title=COVID-19-Crisis-Response-in-MENA-Countries
OECD. (2020b). COVID-19 crisis response in MENA countries. Tackling Coronavirus (Covid-19): Contributing to A Global Effort, 09-11.
Ramadani, A. N., Sartika, D., & Herawaty, H. (2022). Increase in Unemployment Rates During the Covid-19 Pandemic. 15(3).
Su, C. W., Dai, K., Ullah, S., & Andlib, Z. (2022). COVID-19 pandemic and unemployment dynamics in European economies. Economic Research-Ekonomska Istrazivanja , 35(1), 1752-1764. https://doi.org/10.1080/1331677X.2021.1912627
Tegep, J., Suratman, E., & Indra, S. (2019). International Journal of Economics and Financial Issues The Failure of Foreign Direct Investment to Explain Unemployment Rate and the Mediating Role of Economic Growth and Minimum Wage. International Journal of Economics and Financial Issues |, 9(2), 154-161. http:www.econjournals.com
Zeb, N., Qiang, F., & Sharif, M. S. (2014). Foreign Direct Investment and Unemployment Reduction in Pakistan. International Journal of Economics and Research, 10-17.
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.