The interrelationship between unemployment and indicators of socio-economic development

Abstract

Unemployment is a complex socio-economic phenomenon in which a part of the economically active population does not have a job or income. Unemployment has negative socio-economic consequences, among which the main ones are: the growth of marginal population groups, the criminalization of society, the psychological depression of the unemployed is expressed by suicide, alcoholism, drug addiction, and as a result, a decrease in natural population growth and life expectancy. Such a complex and multifaceted phenomenon as unemployment depends not only on the economic indicators of the countries' development, but also on the indicators of the social development of societies. Therefore, the purpose of the work will be to identify the interrelationships of unemployment and socio-economic indicators of the countries' development. For the analysis, data was obtained from the open databases of 2 organizations "The World Bank" and "The Heritage Foundation". Based on this, 162 countries and 84 indicators of socio-economic development were selected. The data was prepared for modeling, the optimal number of clusters was determined. As a result of simulation, 9 different clusters were obtained. During the analysis of clustering results, it was found that countries with a higher index of economic freedom usually have a lower unemployment rate than countries with a lower level of economic freedom. The indicator of economic freedom is only a reflection of state policy at various levels: citizens' rights, judicial efficiency, tax policy, freedom of labor, business and investment, etc. Therefore, in order to reduce the unemployment rate in the country, it is necessary to introduce laws to prevent the improvement of judicial efficiency. It was also found that countries with a higher ratio of GDP per capita have a lower level of unemployment. A lower level of unemployment in countries is also observed with a lower percentage of the self-employed population. The self-employed population has less and less room for work due to new technologies and a very high entry threshold for many activities, such as production, distribution, etc. Positive migration is also interconnected with a decrease in unemployment. A lower unemployment rate is followed by lower loan rates. Lower interest rates on bank loans stimulate business to expand and develop. Along with the decrease in the percentage of the employed population in agriculture, the decrease in the percentage of unemployment in the country is followed. Rather, it is related to a more general and complex process of development of the industrial system of society and scientific and technical development. The presented results can be the basis for further research. For example, developing a factor analysis or building a regression or multifactor model for the countries of the same cluster.