Effects of economic freedom on youth unemployment in sub-Saharan Africa

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Résumé

This research investigates the effects of economic freedom on youth unemployment in sub-Saharan Africa. It covers a panel of 34 countries and the period 2003-2019. It employs the of two stage least squares (2SLS) and structural equation modeling (SEM). The results show that economic freedom reduces youth unemployment through the size of government, the legal system, freedom to trade and regulation. In addition, the analysis of indirect effects shows that economic freedom reduces youth unemployment through economic development, political stability, democracy, natural resource rents and financial development. These results imply that countries in the region should improve these three dimensions of economic freedom, make the most of the exploitation of natural resources, improve financial development, the quality of political institutions and economic development to reduce youth unemployment.

Mots-clés

Economic freedom Youth unemployment Directs effects Indirects effects Sub-Saharan Africa