Analysing the Determinants of Youth Unemployment in Transitional Economies Evidence from Hungary

Habetie, Tadesse Getachew and Kolta, Dóra and Prihoda, Emese (2025) Analysing the Determinants of Youth Unemployment in Transitional Economies Evidence from Hungary. REGIONAL AND BUSINESS STUDIES, 17 (1). pp. 35-53. ISSN 2061-2311

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Abstract

Youth unemployment in Europe poses a serious challenge to the European Union and its member states. The main objective of the study was to investigate the macroeconomic determinants of youth unemployment in Hungary using the Autoregressive Distributed Lag (ARDL) model. To achieve the objective of the study, secondary data was used, which was collected from the World Bank for the period 1992–2022. The study employed a descriptive and explanatory research design with a quantitative research approach. The Augmented Dickey-Fuller (ADF) and Phillips-Perron unit root test was conducted to assess the stationarity of the data. The dependent variable was the youth unemployment rate, while the explanatory variables include gross domestic product, gross domestic saving, inflation rate, and real effective exchange rate. The finding suggests that gross domestic product, real effective exchange rate, and inflation have statistically significant impacts on the youth unemployment rate in the short run. The long run model suggests that gross domestic product, gross domestic saving, real effective exchange rate, and inflation have a statistically significant impact on youth unemployment. Finaly, policy makers need to concentrate on enacting measures that promote economic growth, such as bolstering important sectors of the economy and concentrate on industries with a high capacity for absorbing labour to guarantee that growth results in job creation.

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