Does human capital investment influence unemployment rate in Bangladesh: a fresh analysis

Abstract

<abstract> <p>This study looks at how Bangladesh's human capital investment has affected unemployment from 1995 to 2019. To identify the study's unit root, we employed the ADF and PP tests. The short- term and long-term impacts of human capital investment on unemployment are estimated using the Autoregressive Distributive Lag (ARDL) model. The presence or absence of cointegration is assessed using the ARDL bound cointegration test. The Pairwise Granger Causality test, in contrast, is used to ascertain whether there exist causal relationships between variables. The study's findings demonstrate that government health spending on human capital has a significant impact on Bangladesh's long-term unemployment rate. Government spending on education and the unemployment rate are causally related in a single direction, according to the Pairwise Granger test. In the short term, the analysis showed no discernible relationship between human capital investment and unemployment rates. To build a healthy nation and eventually lower Bangladesh's unemployment rate, it is urged that the government should increase health spending and strengthen the health sector. To connect education with employment, the government may give vocational and career-focused education equal weight with general education.</p> </abstract>