The Role of Unemployment in the ESG Model at World Level

Abstract

In this article, we investigate the role of Unemployment-U in the context of Environmental, Social and Governance-ESG model at World Level. We use data from 193 countries in the period 2011-2021. We apply Panel Data with Random Effects, Panel Data with Fixed Effects, Pooled Ordinary Least Squares-OLS, and Weighted Least Squares-WLS. We found that among other the level of U is positively associated, among others, to “GHG Net Emissions” and “Government Effectiveness”, and negatively associated among others, to “Maximum 5 Day Rainfall” and “Political Stability and Absence of Violence/Terrorism”. Furthermore, we confront eight different machine-learning algorithms to predict the future value of U. We found that the best predictive algorithm in terms of maximization of R-squared and minimization of MAE, MSE, and RMSE is the Linear Regression. The value of U is expected to growth of 1.51% on average for the analysed countries. JEL Codes: D7, D70, D72, D73, D78.