The Impact of Employment and Education on the Economic Growth of Pakistan: A Time-series Analysis

Abstract

Economic development is a fundamental need for the nation of Pakistan. The independent variables in this research can have a direct influence on economic growth. The present research examines the influence of employment and education on the economic development of Pakistan throughout the period spanning from 1981 to 2022. Regression analysis was done to check the short-run and long-run relationship among GDP growth rate, education, and employment. The study implies an augmented-dickey fuller test to check the stationarity of the variables and error terms. In addition, the tests of Ramsey Reset, multi-collinearity, and heteroscedasticity have also been employed in the study. The results of the study indicate the importance of promoting education and the creation of employment opportunities, which in turn will provide a nation with rapid and sustained economic expansion over an extended period. Education and economic growth were shown to be correlated in the short term, but employment and growth were not. The study proposes boosting educational spending to make it more accessible to the public and raising school and higher education enrolment to boost Pakistan's literacy rate. Education quality and quantity should be prioritized. The government should also create jobs and invest in R&D to boost labor force participation and efficiency.