Fractional Regression Model for Investigating the Determinants of the Unemployment Rates in OECD Countries

Abstract

Unemployment is a serious problem for all over the world. It is a crucial task to endeavor with the unemployment for the welfare of the world. Once, the potential factors should be known to accomplish this task. The aim of this study is to investigate the determinants of the unemployment rates using fractional regression models for the 35 OECD (Organization for Economic Co-operation and Development) countries over the periods 2000-2017. We determined the factor affecting the unemployment rate by the fractional regression model using GMMbgw and GMMpre estimators for panel data. The empirical results revealed the significant determinants of unemployment as the result of the fractional regression models. Finally, we observe that saving rates, the growth rate of import and export are expressive on the unemployment rates.