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Research Article | Volume 4 Issue 1 (Jan-June, 2023) | Pages 1 - 6
The Role of Job Creation in Achieving Economic Growth
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 ,
 ,
 ,
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1
Department of Banking and Financial Sciences, Mazaya University College, Thi-Qar, Iraq
2
Department of Business Administration, Dhi Qar Governorate Office, Iraq
3
Department of Business Administration, Directorate of Education of Abu al-Khasib, Basra, Iraq
Under a Creative Commons license
Open Access
Received
Jan. 7, 2023
Revised
Feb. 5, 2023
Accepted
Feb. 14, 2023
Published
Feb. 25, 2023
Abstract

This paper aims to identify the role of job creation strategies in achieving economic growth, which appears clearly through its ability to increase market activity and increase production, which in turn affects the increase in economic growth indicators significantly, specifically in the ministries of industry and agriculture in Iraq. As the existence of job creation strategies is one of the most important elements of the Ministries of Industry and Agriculture in the path of development and optimal economic growth. The conceptual framework of the current study was built on two main variables, namely, job creation as an independent variable, and economic growth as a dependent variable. The main question of the study was formulated as follows: "What is the role of job creation in economic growth in the Iraqi Ministries of Industry and Agriculture?" This study was applied in the ministries of industry and agriculture in Iraq. The current study relies on the descriptive method to analyze the opinions of a sample of (135) working individuals who are chosen randomly and using a set of statistical tools available in SPSS programs. V.22 – AMOS V.22).

Keywords
INTRODUCTION

One of the most significant topics of economics' mainstream research is economic growth. To comprehend the origins and effects of economic growth, various theories have been created. For instance, one of the key factors influencing long-term growth is the caliber of institutions [1,2,3]. The impact of geography on natural geographic circumstances and the type of economic growth [4,5]. The high level of clear income [6,7], and the optimal use of land [8], In addition to human capital accumulation [9,10]. For instance, growing human capital may result in more creative businesses and products, which would indirectly promote economic development. Large-scale prior research in this area has, in fact, stressed the importance of innovation in economic progress [11,12,13]. However, given that this problem has only been raised in a few situations, further study is required to determine the long-term impacts of human capital on innovation and economic growth [14]. Therefore, the issue of whether or not existing human capital is crucial for long-term development still exists [1].

 

Through what has been mentioned, it seems that absorbing unemployment is the best possible investment for idle human capital, and in general it appears that the lack of demand for labor and not the characteristics of workers is the main reason for the spread of unemployment and its increasing levels in Iraq. Job creation strategies are among the most important factors that help absorb high unemployment in developing countries as well as developed countries, and thus those strategies can ultimately improve the country's economic growth [2,15]. For example, integration into the global economy and exports of highly labor-intensive products are vital to increasing the demand for labor in any country. Which makes those countries have some potential to become competitive in light industries, and a decrease in the rate of unemployment in them, which leads to an increase in exports and thus a steady growth in its economy [2]. Which gives a clear vision of the positive circle that works to feed itself, which begins with job creation to absorb unemployment and thus increase production and exports, which leads to economic growth, which in turn works to create opportunities and jobs [16].


 

Research Problem

Most researchers in the field of economic development believe that the development of countries in general and developing countries in particular in terms of economic growth depends to a high degree on the availability of employment and the creation of job opportunities and increasing its levels [17], because the increase in employment opportunities will have a significant impact on Absorbing unemployment directly, which means high productivity of goods and services, which is one of the most important indicators of economic growth. To illustrate this idea, the increase in job creation causes people to have more job opportunities, especially the poor, which provides them with income and the ability to support themselves and their families [8]. It is then possible to alleviate or eliminate poverty. In addition, improving income leads to an increase in purchasing power in general and market activity, which means creating demand, which means creating an opportunity for commercial and industrial projects alike towards making profits by meeting those needs. Thus breaking the vicious circle of poverty with the present [18]. And despite the presence of a vision that may be used to solve the issues of slow economic growth and absorbing unemployment, which was revealed by the World Bank's annual report on global development for the year 2012 [19] due to the significant worry that policymakers and the business community have around the world due to the nearly 200 million people who are unemployed, of which roughly 75 million are under the age of 25. Opportunities for full employment were avoided: About 600 million new jobs must be created in the next 15 years in order to accommodate the admission of the world's population into the labor market. primarily in Africa and Asia. By implementing employment development tactics in emerging nations, solutions have been presented [8,14]. However, it also shows that the formulation of strategies to solve these problems still suffers from an implementation gap, and thus, these problems have not been satisfactorily mitigated, particularly in developing countries [1].

 

In view of the problems explained above, in addition to the increase in unemployment rates and the cessation of many industrial and agricultural projects in Iraq, there appears an urgent need to adopt job creation strategies to absorb the largest possible capacity of unemployment in order to achieve the most important goal, which is to increase economic growth through the expansion of the productivity of goods and services. From the foregoing, the problem of the study can be summarized through the following question:

 

What is the role of job creation in achieving economic growth in the Iraqi business environment? What is the role of absorbing unemployment in that relationship?

Study objectives: The objective of the current study was to create a conceptual model for the study variables represented by the independent variable (job creation), the dependent variable (economic growth), and the intermediate variable (absorption of unemployment). This was done with the intention of presenting conclusions that represented the reality of the significance of job creation through the contribution of unemployment absorption to economic growth, which It can be applied in the government industry.

 

  • Testing the direct influence relationship between the independent variable (job creation) and the dependent variable (economic growth)

 

The importance of study

There are very few studies that directly evaluated the links between the independent variable (job creation) and the dependent variable, according to a small evaluation of prior research on the variables of the current study (economic growth). And the present study will focus on Iraqi agriculture in an effort to close the gap between the two variables, as earlier studies have demonstrated.

 

Theoretical Framework:

Job Creation: By adopting policies to open small and medium-sized investment projects, developing countries are focusing on employment creation in order to revitalize their economies [20], Additionally, these projects are the catalyst for the creation of new jobs. As a result of lowering the risks of poverty brought on by unemployment, it is a crucial factor in the expansion and recovery of the economy in developing nations [21], and that creating more net jobs is not an easy task; it necessitates the development and implementation of strong policies [22,23], The net job creation is calculated by deducting the total number of new jobs from the total number of old jobs in order to determine the growth a nation has experienced through job creation [24], with the aim of obtaining an appropriate degree of reassurance that economic matters are going on in an acceptable manner, as the existence of job creation opportunities means reducing the risk of losing some skills and capabilities, and working to constantly compensate them [25].

 

There is no doubt that job creation in countries that seek to achieve a competitive advantage in the economic sector will lead them to achieve the best possible prosperity in this sector, and this cannot be achieved in isolation from the establishment of projects and investments through which new job opportunities are provided (job creation). [26], Additionally, job creation will result in a decrease in job demolition, therefore the larger the percentage of jobs lost due to employment creation, the more this is a sign of economic growth, and in light of this, nations must take the lead in developing plans that reinforce and encourage the development of new jobs through the adoption of entrepreneurial ventures [27] or offering loans with the intention of investing in ventures that serve as the primary source of new job opportunities [28,29], Additionally, focusing on the issue of employment creation makes it easier for nations to accept and support creative enterprises by fostering new ideas and turning them into actual projects [30,31], Governments must first establish a job creation law and support its implementation given the process's obvious relevance and the economic impact it has on people's lives [32].

 

Economic growth

Poverty is one of the main challenges of our contemporary world, as most of the world's population, especially developing countries, suffer from multidimensional poverty, with deprivation in health, economic opportunities, education and standard of living. So many countries around the world are working to narrow the gap between rich and poor; However, the gap appears to be widening. Hence, it seems clear that poverty, slow economic growth, and inequality in the distribution of income and wealth are endemic in developing countries [33,34], so the focus of some developing countries was on a group of sectors and according to resources available, most countries focused on the agricultural sector [35], and on how agriculture can better contribute to inclusive economic growth [36]. This stems from their belief that the main source of national wealth is agriculture [37], moreover, in the recent past, the accumulation of physical capital was considered a quasi-individual factor for economic growth. Later, the improvement in technology, which represents the increase in production and services, was considered an external variable to influence economic growth [38,39]. As for middle-income policies, the empirical literature shows that monetary policy has some modest effects on economic parameters [40], and there are some opinions focusing on the significant role of financial intermediation in the growth of the economy [41].

 

On the other hand, work can be considered the most fundamental and dynamic element of all economic activity, as well as a component of natural development and social wellbeing. Even if the idea of employment is only applicable to those who actively contribute to the state of the economy [42], The ultimate goal of this process is to determine and meet the requirements of the entire population in terms of consumer products and services. Economic activity or output cannot in fact be simply maintained constant, regardless of whether the population is increasing or decreasing [43]. Accordingly, advancement is the name of the game in economic activity as it is everywhere else. Regression then starts where advancement ceases or cannot be maintained, which is accompanied by drops in each person's income, standard of life, and general well-being. Thus, the goal of economists and everyone else involved in the economy is to gradually raise output, gross domestic product, and income per capita [44], and the enhancement of the population's physical, mental, and related living situations. In other words, whether stated explicitly or not, the main objective is economic expansion [45].

Last but not least, as a result of globalization, the majority of emerging nations have loosened limitations on trade in commodities and services and liberalized the financial industries. Given that foreign direct investment fosters  economic  and  growth,  some  may have provided tax advantages and subsidies to draw in foreign capital. In actuality, it might not be feasible. According to the neoclassical growth theory, an increase in foreign direct investment may spur economic expansion by boosting capital formation [46]. The neoclassical paradigm holds that foreign direct investment (FDI) does not contribute to capital formation or growth when it takes the form of mergers and acquisitions and gains from asset sales do not compound [47]. Foreign direct investment displaces local investment when it comes to funding investment projects since foreign enterprises buy existing assets from local owners rather than adding additional or complementary resources [48].

 

 

Figure 1: Study plan

 

Study Plan and Building and Developing Hypotheses

The hypothetical scheme of the study, as illustrated in Figure, details the primary variables and their dimensions upon which the study problem was based, as well as the clarification of how the variables relate to one another upon which the study hypotheses were based (1). The creation of the study's hypothetical framework was predicated on the following fundamental premise, from which a number of supporting assumptions flow:

 

  • There is a direct, statistically and significant relationship between job creation and economic growth.

MATERIALS AND METHODS

Study Design and Methodology

The current study will be quantitative in nature due to the benefits that these designs have in terms of their capacity to translate theoretical ideas into practical reality in the form of (digital) results, which in turn give precise scientific evidence on the nature of the relationships between variables that can be measured. On that, additional study could be established. The descriptive design will be utilized to solve the study's problem and comprehend the phenomena better. By testing hypotheses that describe the nature of the relationship between the variables, this design seeks to characterize the problem and its causes [49,50]. Additionally, the researchers must be able to clearly show how the independent variable influences the dependent variable in order for them to study the causal linkages between the primary and dependent variables [51]. The appropriate method is selected to collect the required data and the information used through the questionnaire tool, analyze it to answer the research questions, and test the hypotheses using a number of statistical tests in order to find a solution to this problem, which served as the catalyst for the start of the research project [52].


Table 1: Results of a normal distribution test

VariablesSkewnessKurtosis

Statistic

Std. Error

Z Skewness

Statistic

Std. Error

Z Kurtosis

job creation

.116

.127

0.913

-.455

.254

-1.791

economic growth

-.006

.127

-0.047

-.137

.254

-0.540

 

Table 2: The Arithmetic Mean, Standard Deviation, and Correlation Coefficient between Variables

Variables

Mean

Std. Deviation

Job creation

Economic growth

job creation

3.514

.580

1

economic growth

3.542

.726

.399**

1

 

Table 3: Testing the main hypotheses

The path

Estimate

S.E.

C.R.

P

Label

H1

job creation

<---

economic growth

.167

.091

2.308

.021

Accept

         

 

Data gathering techniques

The questionnaire, which is one of the most important sources for data collection and consists of a series of questions and options from which the responder can select, was utilized by the researchers to gather data from the study sample for the field component of the study. Thirty items total, arranged into three main categories, made up the final questionnaire. A Likert scale with five points was used to collect the following responses: (strongly agree - strongly disagree).

 

Study population and sample: Population and Sample

Due to the status and significance that these two ministries enjoy, their significant contribution to enhancing economic growth, and their significance in their capacity to generate employment and absorb unemployment, the Ministries of Industry and Agriculture were chosen as the study's sample community. As Sekaran [49] suggested the optimum sample size for each community, a number of managers and employees working in the Ministries of Industry and Agriculture were chosen, and surveys of their attitudes were conducted 135 subjects made up the study sample managers and employees.

RESULTS

The nature of the data distribution

To choose the best statistical approach for analysis, it is necessary to ascertain the nature of the data distribution. When data are distributed regularly, the trend is toward parametric statistics, whereas when data are distributed abnormally, the trend is toward non-parametric statistics [53]. Skewness and Kurtosis will be examined to determine the nature of the data in order to determine the distribution's nature. When the Z value for skewness and kurtosis is within (1.96), the data approaches the normal distribution curve, according to this test, and since the level of significance or degree of confidence necessary in this study is (p 0.05). By dividing the calculated skew and flattening values by their standard error, the Z value is obtained [54]. Table 1 shows the results of the data distribution test:

 

Given that the Z values for skewness and kurtosis did not exceed (1.96) in the above table, it is obvious that the data distribution was normal and parametric statistical procedures would be applied.

 

Correlation and descriptive statistics

Using Table 1, we can describe descriptive statistics and the correlation between the variables. The findings showed that the average of the variables and dimensions, or the average degree of response, ranged from (3.514 to 3.707), and that (3.514-3.707). The data were not widely dispersed, as the standard deviation was minimal. Given that the correlation coefficients are conspicuously smaller than 0.60, Table 1's correlation statistics do not suggest multilinear issues.

 

Testing the main hypotheses

The pathway analysis offered by the AMOS software was used to test the  key  hypotheses. V. 23 The table indicates

that all of the main hypotheses were accepted for the purpose of testing them, which suggests a positive relationship between job creation and economic growth (H1: p.01), job creation in absorbing unemployment (H2: p.01), and internalization of unemployment and economic growth (H3: p.01), as well as between job creation and economic growth through internalization of unemployment (H4: p.01). The primary hypotheses were tested, and the findings are shown in Table 3. Acceptance of the hypothesis depends primarily on an important condition, which is that the C.R values must be greater than 1.96, at the level of 0.05. (Tabachnick and Fidell, 2001).

 

  • H1. There is a direct and positive impact of job creation on economic growth at a significant level (0.01)

CONCLUSION
  • The findings indicated that job creation is crucial for any nation seeking to achieve and sustain economic growth, as it is a direct result of business expansion and an increase in the activity of international trade, which is reflected in one way or another on a number of factors, the first of which is job creation. It entails raising the population's purchasing power, and this is what drives up demand for products and services. In other words, increasing purchasing power is the fundamental element of project success and eliminating investor apprehension about starting initiatives. Second, if the necessary labor force is available, encouragement for investors and project owners encourages output expansion. Expansion: These initiatives will be able to develop in the direction of export, which is the ultimate objective of all commercial, agricultural, and industrial initiatives.

  • The results of the current study show that there is a direct positive effect between job creation and economic growth through the absorption of unemployment. This is due to the fact that the expansion of employment options will greatly affect the direct absorption of unemployment, which leads to high productivity of products and services - which is One of the most important measures of economic growth. To prove this principle, consider how additional employment opportunities are created as a result of increased employment opportunities, especially for the poor. This gives them an income and the means to support their families as well as themselves. And then, poverty can be reduced or even eliminated. In addition, increased incomes enhance the overall purchasing power of consumers and market activity, which in turn creates demand and provides opportunities for both industrial and commercial operations to make money by meeting these demands. Thus ending the cycle of poverty in the present.

 

Recommendations 

  • The study recommended serious interest in applying the Chinese experience in creating jobs through interest in the agricultural sector and the resulting creation of 75 million job opportunities, which made its economic growth achieve qualitative leaps in the path of progress, because this experience is one of the most important experiences in proportion to Iraq The fact that he had gone through a similar experience in previous times and achieved good levels in absorbing unemployment and the reflection of that on achieving increasing levels of agricultural exports.

  • With regard to the industrial aspect, Iraq still represents the fertile ground for creating jobs and absorbing unemployment if it moves to the practical level of activating Iraqi factories and benefiting from the great experiences of neighboring Arab countries and imitating successful large industrial projects or, as Drucker called it, the creative tradition as Japan has done it as the best Countries that work on applying the creative tradition, as many innovations, such as the transistor, which Japan was the first to use in the field of industry, were not the result of Japan's ideas in fact, but rather they used it better than its inventors.

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Publication in high-impact journals
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