The effects of economic growht on unemployment in OECD countries: Panel data analysis (1991-2023)

The concept of economic growth and unemployment are very important macroeconomic concepts for developed and developing countries. It is possible for countries to achieve social and economic prosperity thanks to these two concepts. For this reason, economists have obtained different results by making many different analyzes to examine the relationship between these two concepts over long periods. Although there are many different analyses in the literature, the three most well-known studies are Beveridge Curve, Philips Curve and Okun's Law. Although the first two studies indirectly examined the relationship between economic growth and unemployment, Okun's Law formulated these two macroeconomic concepts. Within the framework of these discussions, it was aimed to determine the relationship between economic growth and unemployment in 32 OECD countries covering the period 1991-2023 by panel data analysis. Econometric analysis of the data was analyzed using the STATA 14.2 program. In the study, the dependent variable is unemployment data (UR) and the independent variable is economic growth (GDP) data. Since the study data consisted of time series and cross-sectional data, panel data analysis was used in the study. In the first stage, the presence of cross-sectional dependence in the variables and the model was analyzed by Breusch Pagan LM (1980), Peseran Scaled LM, Bias-Corrected Scaled LM and Peseran CD Test methods, and in the second stage, the heterogeneity of the model was analyzed by Peseran and Yamagata (2008) tests. The causality relationship between the variables was analyzed by Dumitrescu and Hurlin (2012), Panel Granger Causality Test. Finally, Westerlund (2007) Panel cointegration analysis was performed for UR and GDP. In this direction, the direction of causality has been tested in line with economic and social sciences.