Labor Market Dynamics in Albania

Abstract

This thesis analyzes empirically the co-integrating relationship between unemployment and GDP in the Albanian economy in 1991-2013. Since one of the variables used in this master thesis are non-stationary and present a unit root, Johansen’s co-integration technique has been applied. This methodology has allowed for obtaining of a co-integrating relationship among variables in the long run. The co-integration results provide evidence of a unique co-integrating vector. In other words, in the long-run in Albania, GDP and unemployment have moved together in the inverse direction in the long run.