Determinants of unemployment in less developed countries

Unemployment is a major issue all over the world in both developed and under developed countries. This study analyzes those factors which determine unemployment in Pakistan. The data is taken from1990-2015 to see the empirical relationship between GDP, Population, Technical & Vocational education, degree colleges and universities enrollment. ARDL (Auto Regressive Distributed Lag) approach is used to check the determinants of unemployment in Pakistan. Long run results show that there is a negative relationship between GDP and unemployment. Population has positive and significant relation and technical & vocational education has positive and insignificant relation with unemployment in Pakistan. The results of Short run ECM-1(Error correction model) show that the negative and significant relationship with unemployment. The CUSUM and CUSUMQ (Graph) are represent that model is structurally stable within critical bound at 5% level of significance.