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Journal of Applied Sciences
  Year: 2015 | Volume: 15 | Issue: 9 | Page No.: 1190-1195
DOI: 10.3923/jas.2015.1190.1195
 
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Determinants of Unemployment in Swaziland

Zitsile Z. Khumalo and J. Hinaunye Eita

Abstract:
The study investigates the macroeconomic determinants of unemployment in Swaziland. The Engle-Granger two steps econometric technique was used to investigate the effect of macroeconomic variables on unemployment in Swaziland. This econometric technique was used to also test the existence of long-run relationship between unemployment and its macroeconomic determinants. The investigation found evidence of long-run relationship between unemployment and its macroeconomic determinants. The results indicate that the ratio of actual to potential Gross Domestic Product (GDP), inflation, government spending, dummy variable for democratization of South Africa in 1994 and global economic crisis of 2007-2009 are determinants of unemployment in Swaziland. The Engle-Granger procedure was used to estimate the empirical model. The results indicate that unemployment in Swaziland can be reduced by accelerating GDP at the expense of high inflation. It can also be reduced by allocating a greater proportion of government spending on activities that increase investment and GDP. The simulated model results indicate that the model is good as the estimated of forecasted unemployment tracks the actual unemployment.
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How to cite this article:

Zitsile Z. Khumalo and J. Hinaunye Eita, 2015. Determinants of Unemployment in Swaziland. Journal of Applied Sciences, 15: 1190-1195.

DOI: 10.3923/jas.2015.1190.1195

URL: https://scialert.net/abstract/?doi=jas.2015.1190.1195

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