Determinants of Unemployment in Bangladesh: A Case Study

Abstract

A very important issue that plays a crucial role in development of the economies is the underutilization of its human capital i.e. unemployment. This paper investigates macroeconomic determinants of unemployment rate in Bangladesh economy for the period of 2000-2011 using Simple Single Equation Linear Regression Model (SELRM). The variables selected for the study are Unemployment rate, GDP growth rate, Exchange rate and Inflation rate (CPI based). The results of regression analysis showed significant impact of all the variables. Our main finding includes that Inflation rate stimulate unemployment positively and GDP growth rate and Exchange rate has negative impact on unemployment.

Keywords: Unemployment rate, GDP growth rate, Exchange rate, Inflation rate.

JEL Classification: C22