Journal of Economics and Development Studies

Threshold Effect of Government Consumption on Employment: Evidence from African Countries
Coffie Francis José N’GUESSAN

Abstract
This paper uses a Panel Threshold model to evaluate the relationship between Government Consumption and employment. The model is applied to a Panel of 41 African countries over the period 1980 to 2014.The results show that there is a threshold effect in the relationship between Government Consumption and employment. Indeed, Government Consumption has a positive effect on employment when it is lower than 20.43% of Gross Domestic Product. But, above it does not impact employment. This study gives information for targeting fiscal policy in link with labor market performance and show that policy advices that are based on linear approaches may be misleading.

Full Text: PDF     DOI: 10.15640/jeds.v5n2a2