Asymmetric effects of economy on unemployment in Algeria: Evidence from a nonlinear ARDL approach

Figures & data

Figure 1. Evolution of youth unemployment during the period 2004–2018.

Source: (CNES Report, 2019, p. 27).

Figure 2. Evolution of unemployment rate and GDP during the period 1970 –2018.

Source: NOS (2019).

Table 1. Evolution of average unemployment rate and average economic growth rate

Time period	Average unemployment rate%	Average real output growth rate%
1970–1985	18,54	4,84
1985–1999	24,7	1,99
1999–2018	14,15	3,46

Source: NOS (2019).

Figure 3. Output gap.

Figure 4. Unemployment gap.

Table 2. Unit root test results

Variables	Augmented Dickey–Fuller test results				Phillips–Perron test results
	ADF without trend		ADF with trend		PP without trend		PP with trend
	Level	1st Difference	Level	1st Difference	Level	1st Difference	Level	1st Difference
GDP^C	−2.934	−6.139***	−2.899	−6.064***	−2.156	−6.227***	−3.125	−6.122***
UNT^C	−4.764***	-	−4.709***	-	−3.257**	-	−3.212*	-

**,*** Show that the variables are significant at 1%, 5% and 10% levels, respectively

Table 3. Bounds test

Models	Fstatistic	lower bound	upper bound
Linear model	2.074	3.563	4.875
Nonlinear model	8.035	3.368	4.203

Figure 5. CUSUM Test.

Figure 6. CUSUM of Squares Test.

Table 4. Results of the NARDL model

Dependent Variable: $UN{T}^C$Long-run estimation
Variables	Coefficient	Std. error	t-Statistic	Prob.
$GD{P}^{C+}$	−0.0209	0.0062	−3.324***	0.0021
$GD{P}^{C-}$	−0.0106	0.0063	−3.273***	0.0024
Diagnostic tests	Jarque-Bera test	LM	ARCH	RESET
Statistic	${{\chi }^2}_{\left(2\right)}=0,18$	$F_{\left(2,33\right)}=0,32$	$F_{\left(1,41\right)}=0,55$	$F_{\left(1,34\right)}=0,14$
Probability	0.91	0.72	0.46	0.72
Long-run Symmetry	FStat = 10.33		Prob = 0.003
Short-run estimation
$\mathrm{\Delta }UN{T}_{t-1}^C$	−0.37	0.0033	−3.026***	0.0055
$\mathrm{\Delta }GD{P}_t^{{ }^{C-}}$	−0.002	0.056	−0.367	0.123
$\mathrm{\Delta }GD{P}_{t-1}^{{ }^{C-}}$	−0.0006	0.004	−0.008	0.362
$\mathrm{\Delta }GD{P}_{t-2}^{{ }^{C-}}$	0.015	0.0045	2.073***	0.009
$\mathrm{\Delta }GD{P}_{t-3}^{{ }^{C-}}$	0.018	0.0078	2.611***	0.007
$EC{T}_{t-1}$	−0.721	0.088	−5.914***	0.001
$R^2=0.55$
$Loglikelihood=-76.3$
$DW=2.01$

Figure 7. Dynamic multipliers for Algeria.

Table 5. Results of the long-run estimation

Dependent Variable: $UN{T}^C$Long-run estimation
Variables	Coefficient	Std. error	t-Statistic	Prob.
$GD{P}^{C+}$	−0.0314	0.0011	−4.983***	0.0001
$GD{P}^{C-}$	−0.0286	0.0018	−4.5393***	0.0002
INFL	−0.1302	0,5303	−4,073***	0,0004
ER	−0.1024	0.0342	−2.989***	0,0027
Diagnostic tests	Jarque-Bera test	LM	ARCH	RESET
Probability	0.91	0.72	0.46	0.72
Long-run Symmetry	FStat=13.54		Prob=0.001