Relation between Inflation, Unemployment and Protest in Selected Countries Using Panel Data Estimation

Abstracts. Evaluating the connection between political protest behavior, inflation, and unemployment in rising nations was the main objective of the study. By analyzing how random panel models construct the association between the frequency of protests and economic grievances (inflation and unemployment rate) over a period of years, the study specifically addressed a gap in the literature. This study also assessed the impact of control variables (financial and debt crises, level of electoral democracy, etc.) on the frequency of political protest behavior using a panel estimating dataset. Using the Harvard University Data-verse's "Mass Mobilization Protest Data" from 1990 to 2020, I made use of variables pertaining to protests and demonstrations in relation to the dataset. We also used the seasonally adjusted unemployment statistic, which shows the unemployment rate as a percentage of the work force. The Modelled Estimates and Projections database from 2010 to 2022 by the International Labour Organization (ILO) was also utilized by me; it was made available to me via World Bank Open Data. I use the World Bank Global Database on Inflation, which I used to compute inflation from 1970 to 2022, with 209 countries covered by this global database. A cross-sectional time series dataset with repeated observations from 2000 to 2021 was utilized in the research design to test the hypothesis that economic conditions affect protest. The scope of the investigation ensured variations in the data by allowing the economic circumstances before and after the crisis to be investigated. The observations included more than 500 country-years. We used the hypothesis regression panel data model "Common Effects" and examined the R-squared, Adjusted R-squared, F-statistics, and P-value in order to evaluate the panel data model's influence and the significance of the independent variables. Our fixed effects model assumes that individual differences may be accounted for with a dataset that includes data from 28 nations by utilizing a dummy variable and the Least Squares Dummy Variable (LSDV) technique to account for differing intercepts. Furthermore, to assess the temporal fixed effects, we used the control variable of currency and debt crises, which can have significant effects on inflation, unemployment, and overall economic conditions—all of which can independently affect the frequency of protests. The results imply that there is a strong and positive relationship between inflation and the frequency of protests. This link highlights the role that inflationary pressures play in promoting social unrest and civic involvement. Finally, we draw the conclusion that when considering the relationship between unemployment and the frequency of protests in a few selected countries, higher unemployment rates do not necessarily lead to protests immediately and that other variables and time play a significant role in moderating this relationship.