Political instability and youths unemployment in sub‐Saharan Africa

The main objective of this study is to analyze the effect of political instability on youths unemployment in sub‐Saharan Africa. Particular interest is devoted to the channels through which political instability affects youths unemployment. The empirical analysis covers a sample of 23 countries for the period 2000–2016. To better characterize the labor market framework in sub‐Saharan Africa, the empirical analysis incorporates the impact of political instability on youths underemployment and labor underutilization. Using panel data techniques, the results show that political instability increases youths unemployment, underemployment, and labor underutilization in sub‐Saharan Africa. The main transmission channels identified are foreign direct investment, domestic investment, gross domestic product, government spending, human capital, and labor market flexibility. The findings confirm the investigated hypothesis. As the main policy implication, policymakers in sub‐Saharan Africa should resolve political instability as a priority toward addressing youths unemployment.