THE EFFECT OF R&D EXPENDITURES ON YOUTH UNEMPLOYMENT: THE EXAMPLE OF BRICS-T COUNTRIES

Abstract

Technological advances made as a result of R&D activities have significant effects on both the amount of output and unemployment rates. However, there are different approaches to the effects of studies in the field of R&D on unemployment. Especially in developing countries, the youth unemployment problem focusing on the insufficiency of investments continues as an important problem. The increase in R&D investments will be able to increase the success rate of the enterprises by contributing positively to the innovation process. The success rate of businesses is largely associated with the level of profit it receives, and businesses that increase their dividends will tend to maximize profits by increasing their scales. Hence, increasing employment opportunities may be effective in decreasing unemployment rates. In other terms, the positive effect of technology on indirect employment has been revealed by many researchers. The aim of this study is to determine the long and short term relationship between R&D expenditures and young unemployment rate for BRICS-T countries for the period 2009-2019 with the help of panel cointegration analysis. As a result of the analysis, R&D expenditures have reduced youth unemployment rate by 3.9% in the long term and 2.1% in the short term. In addition, one-way causality was determined from R&D expenditures to youth unemployment rate.