Does growth of Gross State Domestic Product can manage unemployment in India? A State-level Analysis

Abstract

Unemployment and Gross State Domestic Product (GSDP) is a complex and critical aspect of economic research, with a particular focus on the impact of GSDP on unemployment from 2017 to 2022. In summary, this research paper examines the intricate interplay between these two variables, aiming to understand how changes in GSDP impact unemployment rates in different states of India and growth of the said variables. Growth rate of the variables has been calculated using year over year growth rate (YOY), compound annual growth rate (CAGR), and relationship between the variables find out using correlation and Granger causality test. It investigates the potential causal links, cyclical patterns, and policy implications, shedding light on the dynamic nature of employment and economic growth at the state level. The findings of the study suggest that growth of the variables are fluctuative in nature and there is a negative relationship between GSDP and unemployment rate in the states as well as there is a existence of unidirectional or bidirectional causality.