Determinants of Unemployment in Sabah: Long-Run and Short-Run Analysis

This study explores the determinants of unemployment in Sabah from 1982 to 2020. This studyutilised the Autoregressive Distributed Lag order (ARDL) model to investigate the linearrelationship between job vacancies, economic growth, government spending, labour forceparticipation, and inflation on unemployment. Job vacancies were disaggregated into five typesbased on occupations to better understand the symmetric relationship between unemploymentand vacancies based on the Beveridge curve theory. Alongside Beveridge Curve theory, thisstudy included Okun’s Law, Keynesian theory of fiscal policy, and Phillips curve theory, whichexplain the factors of unemployment. Findings revealed that unemployment was influenced byeconomic growth (GDP) and inflation (CPI) in Sabah.