Research Publication Title

Does Terrorism Affect the Unemployment Rate of the Targeted Country?

Presenter Information

Austin Mender

Major

Economic

Faculty Mentor

Conaway

Keywords

OLS, Terrorism, Unemployment, Labor Force, Macroeconomics

Abstract

In this paper I use country level data from 2007 to 2016 to analyze the relationship between terrorism and unemployment rates in a given country. I do this by using an ordinary least squares regression to find the correlation between the number of terrorist attacks in a country and the unemployment rate in the following period. In the recent years the number of terrorist attacks has grown throughout the world and does not look to be slowing down any time soon. This makes it important for us to figure out what affects terrorism will have on the world in the next few decades. All the current literature in this field focuses on how unemployment rate affects the probability of terrorist attacks. My research focuses on the opposite question of how terrorism affects the unemployment rate. In my model I use country level fixed effects and control for population growth, violence, and wealth of the country to examine the relationship between the number of terrorist attacks and the unemployment rate. I find there to be no link between terrorism and the unemployment rate in the tested countries. This could be due to omitted variables and lack of quality of the data used in the model as the definition of terrorist attacks is very broad in scope in the dataset that I used.

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Does Terrorism Affect the Unemployment Rate of the Targeted Country?

In this paper I use country level data from 2007 to 2016 to analyze the relationship between terrorism and unemployment rates in a given country. I do this by using an ordinary least squares regression to find the correlation between the number of terrorist attacks in a country and the unemployment rate in the following period. In the recent years the number of terrorist attacks has grown throughout the world and does not look to be slowing down any time soon. This makes it important for us to figure out what affects terrorism will have on the world in the next few decades. All the current literature in this field focuses on how unemployment rate affects the probability of terrorist attacks. My research focuses on the opposite question of how terrorism affects the unemployment rate. In my model I use country level fixed effects and control for population growth, violence, and wealth of the country to examine the relationship between the number of terrorist attacks and the unemployment rate. I find there to be no link between terrorism and the unemployment rate in the tested countries. This could be due to omitted variables and lack of quality of the data used in the model as the definition of terrorist attacks is very broad in scope in the dataset that I used.