Can Power Supply Play Any Role for Unemployment in Pakistan? An Empirical Investigation
Government College University, Faisalabad, Pakistan
The unemployment is threatening issue all over the world particularly in developing countries. The study aims to quantify the effect of power supply on unemployment in Pakistan. In addition, it examines the linkage among manufacturing capacity utilization, interest rate, exchange rate and unemployment. The study uses time-series data ranging from the period 1980-15 for analysis. The Augmented Dickey Fuller (ADF) test, Trend analysis, Ordinary Least Square Regression Models and Co-integration test are applied. The study reveals that power supply (electricity wastage rate and electricity power consumption) have significant negative impact, whereas manufacturing capacity utilization, interest rate and exchange rate have insignificant impact on unemployment. One-kilo watt increase in electric power consumption would decrease the level of unemployment about 3 percent. The co-integration model shows presence of a long-term association among different variable used in the study. The study focuses the detrimental issue for the manufacturing industry of Pakistan i.e. power supply and unemployment. In addition, it recommends that government should boost energy supply up and devise the need of developing more efficient plans and reliability in strengthening the power sector.
Keywords: Power Supply, Manufacturing Capacity Utilization, Interest Rate, Exchange Rate, Unemployment.