Abstract

This paper employs the structural change with threshold approach to empirically verify Okun's law in the DRC. Utilizing quarterly data, the findings robustly support the existence of Okun's law in the DRC, albeit with a coefficient lower than that originally proposed by Okun. Moreover, the results reveal that the Okun coefficient in the DRC fluctuates significantly over time, irrespective of the economy's recessionary or expansionary phase. Based on these findings, it is imperative to diversify production across all sectors of the economy and enhance the business climate to ensure that economic growth translates into a notable reduction in the unemployment rate. Additionally, improving the education and skills of the labor force emerges as another crucial factor in this regard.

Key words: Okun's law, structural change with threshold, Democratic Republic of Congo (DRC).