THE IMPACT OF ECONOMIC GROWTH ON UNEMPLOYMENT IN SRI LANKA

Abstract

The concepts of economic growth and unemployment are the most important variables in the sense that all economies are choosing and implementing economic policies. The purpose of this study to investigate the relation between economic growth and unemployment in Sri Lanka for the time 2001- 2020. Here the economic growth rate was used as the independent variable and the unemployment rate, the dependent variable. A simple linear regression model was developed to identify the relationship between economic growth rate and unemployment. It was found that there was a negative relationship between the independent and the dependent variable. The finding of the simple linear regression model was U = 6.066 - 0.072EGR. Thus, when economic growth rate increased by 1%, unemployment decreases by 0.072. Several suggestions that can be made based on the findings. That is, Sri Lanka needs to adopt the necessary policies and actions to reduce unemployment in order to achieve high economic growth. Reducing unemployment will reduce inequality, poverty and enable us to achieve high economic growth in the long run