Impacts of human capital, the fourth industrial revolution, and institutional quality on unemployment: An empirical study at Asian countries
DOI:
https://doi.org/10.15549/jeecar.v10i2.1010Keywords:
Unemployment, Human capital, institutional quality, the Fourth Industrial RevolutionAbstract
By using the combination of several regression techniques on panel data, this study explores the influence of human capital, institutional quality, and the Fourth Industrial Revolution on unemployment rates in 46 Asian countries during the period from 2007 to 2020. According to the generalized method of moments (GMM), there are a total of 9 factors affecting the unemployment rate in the researched model, including high-tech exports, inflation, population, gross domestic product, government spending, foreign debt, foreign direct investment, human capital, and institutions. This result confirmed that high-tech development increases unemployment in Asia; however, the nexus between human capital and institutional situation with the unemployment rate is different based on the particular fields. Moreover, some policy implications also have been suggested to reduce unemployment in Asian countries in the context of the Fourth Industrial Revolution.
References
Balog, M. M., & Demidova, S. E. (2021, March). Human capital development in the context of the fourth industrial revolution. In IOP Conference Series: Earth and Environmental Science (Vol. 666, No. 6, p. 062120). IOP Publishing. DOI: https://doi.org/10.1088/1755-1315/666/6/062120
Becker, G. S. (2009). Human capital: A theoretical and empirical analysis, with special reference to education. University of Chicago press.
Cahyadin, M., & Ratwianingsih, L. (2020). External debt, exchange rate, and unemployment in selected ASEAN countries. Jurnal Ekonomi & Studi Pembangunan, 21(1), 16-36. https://doi.org/10.18196/jesp.21.1.5029 DOI: https://doi.org/10.18196/jesp.21.1.5029
Cairó, I., & Cajner, T. (2018). Human capital and unemployment dynamics: Why more educated workers enjoy greater employment stability. The Economic Journal, 128(609), 652-682. https://doi.org/10.1111/ecoj.12441 DOI: https://doi.org/10.1111/ecoj.12441
Connelly, R., & Zheng, Z. (2003). Determinants of school enrollment and completion of 10 to 18 year olds in China. Economics of education review, 22(4), 379-388. https://doi.org/10.1016/S0272-7757(02)00058-4 DOI: https://doi.org/10.1016/S0272-7757(02)00058-4
Eita, J.H. and Ashipala, J.M. (2010) Determinants of Unemployment in Namibia. International Journal of Business and Management, 5, 92-104. DOI: https://doi.org/10.5539/ijbm.v5n10p92
External debt stocks by World Bank, International Debt Statistics. The World Bank. https://data.worldbank.org/indicator/DT.DOD.DECT.CD
Foreign direct investment by International Monetary Fund. The World Bank. https://data.worldbank.org/indicator/BX.KLT.DINV.WD.GD.ZS
Gaponenko, N. V., & Glenn, J. C. (2020). Technology Industry 4.0: Problems of labor, employment and unemployment. Studies on Russian Economic Development, 31(3), 271-276. https://doi.org/10.1134/S1075700720030065 DOI: https://doi.org/10.1134/S1075700720030065
GDP by World Bank national accounts data, and OECD National Accounts data files. The World Bank. https://data.worldbank.org/indicator/NY.GDP.MKTP.CD
General government final consumption expenditure by World Bank national accounts data, and OECD National Accounts data files. The World Bank. https://data.worldbank.org/indicator/NE.CON.GOVT.ZS
Government Effectiveness by Worldwide Governance Indicators. Data as of June 2022. http://www.info.worldbank.org/governance/wgi/
Gross capital formation by World Bank national accounts data, and OECD National Accounts data files. The World Bank. https://data.worldbank.org/indicator/NE.GDI.TOTL.ZS
Hedvi?áková, M., & Král, M. (2018). Level of industry automation 4.0 in the Czech Republic and impact on unemployment. European Financial Systems, 160, 2018.
Higashi, Y. (2002). Firm specific human capital and unemployment in a growing economy. Japan and the world economy, 14(1), 35-44. https://doi.org/10.1016/S0922-1425(01)00082-2 DOI: https://doi.org/10.1016/S0922-1425(01)00082-2
High-tech export by United Nations, Comtrade database through the WITS platform. Data as of June 2022. The World Bank. https://data.worldbank.org/indicator/TX.VAL.TECH.CD
Ho, K. W., & Tan, R. (2008). Nonmonotonic relationship between human capital and unemployment: an exploratory study with empirical evidence on Singapore. Applied Economics Letters, 15(15), 1177-1185. https://doi.org/10.1080/13504850500461399 DOI: https://doi.org/10.1080/13504850500461399
Hoti, A. (2004). Human Capital and Unemployment in Transition Economies: The Case of Kosova. The Institute of Economics Zagreb, 163-188. DOI: https://doi.org/10.2139/ssrn.921000
Hu, G. G. (2021). Is knowledge spillover from human capital investment a catalyst for technological innovation? The curious case of fourth industrial revolution in BRICS economies. Technological forecasting and social change, 162, 120327. https://doi.org/10.1016/j.techfore.2020.120327 DOI: https://doi.org/10.1016/j.techfore.2020.120327
I.M.F (2020). IMF annual report. Downloaded at https://www.imf.org/external/pubs/ft/ar/2019/eng/index.htm
Inflation rate by International Monetary Fund Datasets. Data as of June 2022. International Monetary Fund. https://www.imf.org/external/datamapper/PCPIPCH@WEO/OEMDC/ADVEC/WEOWORLD
Kirema, P. K. (2019). Effect Of Trade Openness On Unemployment Rate In Kenya (Doctoral dissertation, University of Nairobi).
Krueger, A. B., & Lindahl, M. (2001). Education for growth: Why and for whom? Journal of economic literature, 39(4), 1101-1136. DOI: 10.1257/jel.39.4.1101 DOI: https://doi.org/10.1257/jel.39.4.1101
Kwon, D. B. (2009, October). Human capital and its measurement. In The 3rd OECD world forum on “statistics, knowledge and policy” charting progress, building visions, improving life (pp. 27-30).
Mankiw, N. G. (2001). The inexorable and mysterious tradeoff between inflation and unemployment. The Economic Journal, 111(471), 45-61. https://doi.org/10.1111/1468-0297.00619 DOI: https://doi.org/10.1111/1468-0297.00619
Maqbool, M. S., Mahmood, T., Sattar, A., & Bhalli, M. N. (2013). Determinants of unemployment: Empirical evidences from Pakistan. Pakistan Economic and Social Review, 191-208. https://www.jstor.org/stable/24398836
Mincer, J., & Danninger, S. (2000). Technology, unemployment, and inflation. DOI: 10.3386/w7817 DOI: https://doi.org/10.3386/w7817
Moock, P. R., Patrinos, H. A., & Venkataraman, M. (2003). Education and earnings in a transition economy: the case of Vietnam. Economics of Education Review, 22(5), 503–510. https://doi.org/10.1016/S0272-7757(03)00039-6 DOI: https://doi.org/10.1016/S0272-7757(03)00039-6
Mosikari, T. J. (2013). The effect of unemployment rate on gross domestic product: Case of South Africa. Mediterranean Journal of Social Sciences, 4(6), 429. http://dx.doi.org/10.5901/mjss.2013.v4n6p429 DOI: https://doi.org/10.5901/mjss.2013.v4n6p429
Ogbeide, F. I., Kanwanye, H., & Kadiri, S. (2015). The determinants of unemployment and the question of inclusive growth in Nigeria: Do resource dependence, government expenditure and financial development matter?. Montenegrin Journal of Economics, 11(2), 49. DOI: 10.14254/1800-5845.2015/11-2/3 DOI: https://doi.org/10.14254/1800-5845.2015/11-2/3
Political Stability by Worldwide Governance Indicators. Data as of June 2022. http://www.info.worldbank.org/governance/wgi/
Population by United Nations Population Division. The World Bank. https://data.worldbank.org/indicator/SP.POP.TOTL
Primary completion rate by UNESCO Institute for Statistics. Data as of June 2022. The World Bank. https://data.worldbank.org/indicator/SE.PRM.CMPT.ZS
Raifu, I. A. (2021). The Role of Institutional Quality in Oil Price-Unemployment Nexus in African and Asian Oil-Exporting Countries. https://doi.org/10.21203/rs.3.rs-953547/v1 DOI: https://doi.org/10.21203/rs.3.rs-953547/v1
Sahnoun, M., & Abdennadher, C. (2019). The nexus between unemployment rate and shadow economy: a comparative analysis of developed and developing countries using a simultaneous-equation model (No. 2019-30). Economics Discussion Papers. https://www.econstor.eu/handle/10419/196127
Secondary completion rate by UNESCO Institute for Statistics. Data as of June 2022. The World Bank. https://data.worldbank.org/indicator/SE.SEC.CMPT.LO.ZS
Sehrawat, M., & Giri, A. K. (2014). The relationship between financial development indicators and human development in India. International Journal of Social Economics, 41(12), 1194-1208. https://doi.org/10.1108/IJSE-11-2013-0268 DOI: https://doi.org/10.1108/IJSE-11-2013-0268
Shah, S. Z., Chughtai, S., & Simonetti, B. (2020). Renewable energy, institutional stability, environment and economic growth nexus of D-8 countries. Energy Strategy Reviews, 29, 100484. https://doi.org/10.1016/j.esr.2020.100484 DOI: https://doi.org/10.1016/j.esr.2020.100484
Sozinova, A. A. (2018). Causal Connections of Formation of Industry 4.0 from the Positions of the Global Economy. Studies in Systems, Decision and Control, 131–143. https://doi.org/10.1007/978-3-319-94310-7_13 DOI: https://doi.org/10.1007/978-3-319-94310-7_13
Tertiary completion rate by UNESCO Institute for Statistics. Data as of June 2022. The World Bank. https://data.worldbank.org/indicator/SE.TER.ENRR
Trade by World Bank national accounts data, and OECD National Accounts data files. The World Bank. https://data.worldbank.org/indicator/NE.TRD.GNFS.ZS
Unemployment by International Labour Organization, ILOSTAT database. Data as of June 2022. The World Bank. https://data.worldbank.org/indicator/SL.UEM.TOTL.ZS
Zhang, C., & Zhuang, L. (2011). The composition of human capital and economic growth: Evidence from China using dynamic panel data analysis. China Economic Review, 22(1), 165-171. https://doi.org/10.1016/j.chieco.2010.11.001 DOI: https://doi.org/10.1016/j.chieco.2010.11.001
Downloads
Published
How to Cite
Issue
Section
License
The JEECAR journal allows the author(s) to hold the copyright and publishing rights of their own manuscript without restrictions.
This journal applies the Creative Attribution Common License to works we publish, and allows reuse and remixing of its content, in accordance with a CC-BY 4.0 license.
Authors are free to: Share — copy and redistribute the material in any medium or format and Adapt — remix, transform, and build upon the material for any purpose, even commercially.
Under the following terms: Attribution — You must give appropriate credit, provide a link to the license, and indicate if changes were made. You may do so in any reasonable manner, but not in any way that suggests the licensor endorses you or your use.
No additional restrictions — The author may not apply legal terms or technological measures that legally restrict others from doing anything the license permits.
The JEECAR Journal is committed to the editorial principles of all aspects of publication ethics and publication malpractice as assigned by the Committee on Public Ethics.
