Economic Cycles and Employment Growth in the WAEMU Zone: An Analysis Using a Non-Linear ARDL Panel Model

Abstract

The West African Economic and Monetary Union (WAEMU) is facing frequent and diverse crises that are affecting economic stability and employment opportunities in the region. It is important to analyze the impact of economic cycles on employment, as the response of employment supply differs during economic growth and contraction. This article uses a lagged non-linear auto-regressive model (NARDL) on panel data from 1990 to 2022, along with various filters, to examine the relationship between employment and business cycles. The study found that there is an asymmetric relationship between economic growth and employment, with the impact of economic recessions being stronger on long-term employment than on short-term employment. The study suggests that countries have not fully utilized their economic potential to benefit employment. To achieve sustainable economic growth and reduce the proliferation of the informal sector, economies should focus their efforts on translating their potential into action.