How unemployment in different age groups is affected by tourism

• Pages: 84-100

84

Vol.10 No.3

December, 2024

Balkan Journal of

Interdisciplinary Research

E-ISSN 2411-9725

ISSN 2410-759X

Research Article

© 2024 Admir Mulaj

This is an open access article licensed under the Creative Commons

Aribution-NonCommercial 4.0 International License

(hps://creativecommons.org/licenses/by-nc/4.0/)

How unemployment in dierent age groups is aected by tourism

Admir Mulaj

University of Tirana, Albania

DOI: https://doi.org/10.2478/bjir-2024-0028

Abstract

This study investigates the impact of tourism growth on unemployment rates across dierent

age groups in Albania, using annual data from 2001 to 2022. We nd that an increase in the

number of tourists signicantly reduces unemployment for the 20-34 age group, while it

increases unemployment for those over 35 years old. No signicant eect is found for the

16-19 age group. This suggests that policies promoting tourism development should consider

potential negative consequences for older workers and implement measures to mitigate these

eects.

Keywords: Tourism, Unemployment, Age-specic unemployment, Labor market dynamics,

Economic development, Albania, Employment trends, Socioeconomic impact, Youth

employment, Aging workforce

1. Introduction

Tourism is one of the sectors with potential for development in Albania (Schiopoiu

and Ozuni, 2021). Based on the report of the World Travel and Tourism Council

(WTTC), it turns out that in Albania 21.2% of employees work in this sector, namely

in Tourism (246,700 employees). Translated into GDP, when the direct and indirect

impact is taken into account, it turns out that 21.6% of GDP is precisely a product

of tourism (WTTC, 2023). Therefore, one fth of the workforce is engaged in the

Tourism sector (WTTC, 2022).

Given that Tourism is receiving more focus day by day and is expected to further

develop as a sector in the medium-term (Zhang, Xiong, Zhaojun & Lixiang, 2022), it is

very important to study how it aects the lives of citizens. This study is focused on the

impact of changes in the number of tourists on employment according to age groups.

The data available from ocial employment statistics do not create a sucient time

frame to create studies and analyses of the impact of tourism, therefore I decided to

look at the case of unemployment instead of employment. Therefore, the opposite of

85

Balkan Journal of

Interdisciplinary Research

E-ISSN 2411-9725

ISSN 2410-759X

Vol.10 No.3

December, 2024

employment, unemployment according to age groups, will be studied. To nd out

which age group’s unemployment is most aected by the change in the number of

tourists in Albania, this study performs regressions with annual tourism data and

the number of unemployed over 2001-2022. The regression performed is OLS and

diagnostic tests and model importance tests have also been conducted to determine

whether the model used is appropriate or not. In the literature, we have various studies

that look at gender dierences, but no studies that show us whether the change in

the number of tourist arrivals aects dierent age groups, in dierent ways and to

dierent extents. Since the available annual data is for the number of unemployed

individuals, I have calculated the proportion that a particular age group represents

out of the total number of unemployed. The age groups for which unemployment

data is available are: 16-19 years old, 20-34 years old, and over 35 years old. The

period under consideration is the interval of the years 2001-2022 (INSTAT, 2024).

The constructed regression is a simple regression (also due to the small number of

time series) to examine the impact that the change in the number of tourists has on

unemployment by age group. Since the unemployment variable shows a trend over

dierent periods, the trend is also included as a variable in the regression to remove

this eect. In other words, the eect of the unemployment trend has been removed.

The regression performed is:

Age Group = β0 + β1 * ln(tour) + t [1]

Where:

• Age Group is the proportion of unemployed individuals in a specic age group to

the total number of unemployed.

• β0 is the constant.

• β1 is the impact coecient.

• ln(tour) is the natural logarithm of the number of tourists.

• t is the trend.

The logarithm of the number of tourists was taken to improve the variance of the

variable (large numbers) and also to look at the percentage change. We will try to

answer the question of how much the proportion of unemployed people of a certain

age will change when the number of tourists increases by 10%.

The results indicate that an increase in the number of tourists aects the unemployment

rate of the 20-34 age group and those over 35, but the impact is opposite for the two

age groups. For the unemployment rate of the 16-19 age group, the change in the

number of tourists does not show a statistically signicant impact.

The increase in the number of tourists has a positive impact on the younger age

group of 20-34 years, reducing their unemployment rate relative to the total number

of unemployed. Specically, a 10% increase in the number of tourists would lead

to a 0.32 percentage point decrease in unemployment for young people aged 20-34

compared to the total unemployed.

The opposite is true for the slightly older age group, those over 35. It seems that they

are negatively aected by the increase in the number of tourists because their share

of unemployed, compared to the total number of unemployed, increases. Specically,