Determinants of Economic Stability through Female Unemployment: Evidence from Pakistan

Abstract

The objective of this study is to capture a nexus between economic stability and female unemployment in Pakistan. Since economic stability enables macro-economic objectives such as sustainable growth, it creates conductive environment for employment. This study used foreign direct investment (FDI), consumer price index (CPI), fiscal deficit, debt to GDP, interest rate and exchange rate regarded as indicators of economic stability. Whereas, time series data for the period from 1973 to 2015 has employed through Augmented Dickey Fuller and Phillip-Perron and unit roots tests are applied to check the stationarity of the data. It has found that data is a mix of level I(0) and 1st difference I(1), which further justify us to apply auto regressor distributed lags (ARDL) bound testing approach for results. The Error Correction Mechanism (ECM) technique has applied for the short run dynamics of the models. However, CPI has positive and significant relationship with female unemployment in Pakistan. Whereas, exchange rate has negative related with female unemployment. Moreover, it is highly recommended to maintain economic stability through monetary and fiscal policy mechanism and there is also a dire need to formulate gender sensitive policies to create more employment opportunities to female labour force in the economy.