Employment

by Saif Alnaemi

Submitted : Spring 2019

The present paper uses calculus tools for the evaluation of the causes of low employment. This evaluation has been the goal of multiple economists since the formulation of the General Theory of Employment, Interest, and Money by J.M. Keynes (1936). While some of these causes represent frictional causes of unemployment in which the individual temporarily becomes unemployed as he searches for better job opportunities, others result from the cyclical and structural econometric variables. The contribution of the different causes, frictional, structural, and cyclical, to the unemployment rate has been determined by estimating the time series analysis of the monthly unemployment rate using an ARIMA (1,1,8) model. The developed model is capable of accurately predicting the variation of the unemployment rate with a 95.5% accuracy level.

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