Youth Unemployment, Education and Political Instability: Evidence from Selected Developing Countries 1991-2009

Year: 2015 HiCN Working Paper No. 200

This paper investigates the effects of youth unemployment on political instability in developing countries through three hypotheses. Firstly, youth unemployment has significant effects on risk of political instability. Secondly, we consider that the relationship between unemployment rate and political instability is conditional upon education levels. Finally, we examine whether youth unemployment can lead to anti-government demonstrations rather than global instability. Using a sample covering 40 developing countries over the period 1991-2009, we confirm the positive effect of youth unemployment on political violence. However the level of education lowers the magnitude of the effect. The effect of youth unemployment on coups d’état is significant but not robust. Finally, the results suggest that the relationship between youth unemployment and political instability is not robust. A possible explanation is that the main predictors of political instability are also determinants of unemployment. Therefore, youth unemployment can be a symptom rather than the illness and cannot alone explain political instability.