Abstract:

The aim of this study is to investigate the economic determinants of youth unemployment in both developing and developed countries separately. The country samples used in the study were selected according to the classification made by the World Bank based on GDP per capita. In the model used in the analysis, 40 developed and 55 developing countries were considered for the period 1996-2019. Based on empirical studies, per capita GDP, trade, consumer price index (2010=100) and foreign direct investment were determined as independent variables. Total youth unemployment was taken as the dependent variable. With Kao and Johansen-Fisher cointegration tests, in the long run a cointegration relationship between the variables was determined. According to DOLS and FMOLS estimator results in developed countries, a negative and significant relationship was determined between youth unemployment and GDP per capita. According to the DOLS estimator results in developing countries, no significant relationship could be determined between youth unemployment and GDP per capita. However, according to the FMOLS estimator results, the effect of GDP per capita on youth unemployment was determined as negative and significant. According to the causality test of Dumitrescu and Hurlin, a causal relationship could not be determined between GDP per capita and youth unemployment in developed countries. In developing countries, bidirectional causality was found between GDP per capita and youth unemployment.

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