Dynamic effect of government expenditure on unemployment in Algeria : a structural vector autoregressive approach 1970-2018

الملخص EN

This study investigates the effect of fiscal policy shocks on unemployment in Algeria, using Structural Vector Autoregressive (SVAR) methodology over the period 1970-2018.

The results indicate that one shock in public spending with 1% will have a significant and economically positive effect on unemployment rate this shock will generate a decline in unemployment rates, however, the response to government revenue was negative and slight, while those impacts are asymmetric the effect of public spending shock is stronger than revenue shock, we can say that this asymmetry appears in recession period.

The study suggests that government should re-orientate their expenditure in order to encourage job creation and responding to the needs of the labor market.