Ksenija Dumicic1, Vesna Bucevska2 and Emina Resic3

1Faculty of Economics and Business University of Zagreb
  Zagreb, Hrvatska

2Faculty of Economics of Ss. Cyril and Methodius University in Skopje
  Skopje, R. Macedonia

3The School of Economics and Business University of Sarajevo
  Sarajevo, Bosnia nad Herzegovina

INDECS 13(3), 420-433, 2015
DOI 10.7906/indecs.13.3.7
Full text available here.

Received: 9 June 2015
Accepted: 17 July 2015
Regular article


The article investigates the relationship between unemployment rate and development indicators: (1) the GDP per capita in Purchasing Power Parities (PPP in current international $); and (2) the Internet penetration rate, defined as the percentage of Internet users per 100 people. For 34 countries in 2013, only two simple linear regression models based on natural logarithms of data and the Ordinary Least Squares (OLS) estimator appeared to be useful. The simple linear regression Model 1 shows a negative correlation between the main variable under study lnYUemRate and the regressor lnXGDPpc, explaining nearly half of the total variation. The simple linear regression Model 2 shows a negative correlation between lnYUemRate and lnXIntUse, explaining 27 % of the total sum of squares. Regarding clustering of 34 countries based on three variables, the Ward linkage and squared Euclidean distances gave an interesting four-cluster solution. The South-East European (SEE), and especially to the Western Balkan's countries (WBC) are focused. These countries, spread in three clusters, are not homogeneous. Bosnia and Herzegovina and R. Macedonia are with Spain and Greece, all having difficult economic situation. Albania, Montenegro and Serbia are with Bulgaria, Romania and Turkey, all being the SEEC. Croatia is with more developed Italy, Cyprus and Poland, and with less developed Portugal. Central European Slovenia, joined more developed countries of that area, but the most developed European countries comprised a cluster of their own.


unemployment rate, GDP per capita in PPP, Internet penetration rate, multivariate analysis, Western Balkan countries


JEL:C51, O12, O57

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