Unemployment Problem in Bangladesh and Its Impact on Economic Growth

Abstract

This paper analyzes the relationship between unemployment and its impact on economic growth in Bangladesh. We have tested the relation between unemployment and economic growth using a panel data covering four South-Asian counties including Bangladesh for over 20 years. The result has been found that the economic growth has significant effect on unemployment and there is a negative relationship between economic growth and unemployment. The model is adopted for testing relationship is the Fixed and Random Effect Model, Hausman test, using Breusch- Pagan LM test of independence (testing for Cross-Sectional Dependence), Pesaran Test and Wald test (Modified Wald Test). We have tried to compare four South-Asian countries’ like India, Pakistan, Nepal and Bhutan situation of unemployment with Bangladesh for the time period 1990-2010. We have suggested some recommendations to reduce the impact of this problem.