The Relationship between Unemployment Rates and Renewable Energy Consumption: Evidence from Fourier ADL Cointegration Test

Abstract

Unemployment remains an unsolved problem for both developing and developed countries. Solving this problem is one of the important aims for policymakers. In this study, we try to answer the question that whether new energy technologies create new employment areas or not and help to solve unemployment problem. To this end, we use a recently introduced cointegration test that allows structural breaks whose number, location, and form do not affect the accuracy of the test, to examine the long - term relationship between unemployment rates and renewable energy consumption for selected countries of the Organisation for Economic Co-operation and Development (OECD). The results show that there is a cointegration relationship between the variables for Australia, Austria, Chile, France, Germany, Japan, Mexico, Portugal, Spain and United States. The results show that renewable energy consumption positively affects the unemployment rates for Austria, Portugal, and Spain, while it negatively affects the unemployment rates for Australia, Chile, France, Germany, and Japan