Determinants of unemployment in Tunisia: Regional panel analysis
Keywords:
Human development index, unemployment rat, tourism sector, private companies, TUNISIAAbstract
This study examined the effects of the Human Development Index (HDI), tourist arrivals, population size, and output of private sector on regional unemployment in Tunisia using a Panel ARDL (PMG) model. The analysis, based on annual data from 2010 to 2020, uncovered a complex set of relationships between these variables and unemployment rates. In the long term, all variables significantly impacted unemployment. Notably, the HDI had a negative effect, suggesting that higher human development helps reduce unemployment. However, tourism, population growth, and private sector output had positive effects, indicating an increase in unemployment. Surprisingly, the tourism sector which is expected to create jobs in industries like hospitality, transportation, and services was found to contribute to rising unemployment, a contradiction to its perceived role in job creation. In the short term, population growth in the South East region was linked to higher unemployment, while the tourism sector increased unemployment in the Center East, but reduced it in the West. Private sector output contributed to unemployment in the South East and South West regions. Furthermore, the Dumitrescu Hurlin Panel Causality tests found no significant causal relationships between the variables. The study recommends diversifying the tourism sector to ensure sustainable job creation, improving human development through investments in education and healthcare, and implementing targeted regional policies to address unemployment disparities. Additionally, promoting private sector incentives and balanced regional growth, alongside further investigation into indirect relationships between variables, is essential for effective policymaking.
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