Employment generation via natural resources: A novel perspective of Dutch disease in the employment market

Abstract

Regarding the factors influencing employment in emerging economies, the literature relatively ignored this sector. This study tends to analyze employment generation through natural resources while considering each natural resource's component. Also, this study explored the role of economic growth and renewable energy consumption in employment generation in emerging seven economies from 1989 to 2021. Using advanced panel data analysis approaches, this study found significant cointegration between the variable under consideration. Due to the data's non-normal property, this study employs the novel non-parametric approach. It concludes that economic growth and forest rents are the significant factors of employment generation in the region. However, the coal rents, natural gas rents, oil rents, and renewable energy use are significantly reducing employment generation in the selected economies. The adverse impact of these resources validates the Dutch disease in Emerging economies across the period. The results are found to be consistent and robust via bootstrap quantile regression. This study suggests policies regarding the efficient extraction of natural resources such as coal, forests, natural gas, and oil. Also, emerging economies should increase investment in the renewable sector, which reduces emissions and encourages employment.