The impact of increasing or decreasing average wages on the unemployment rate

Abstract

In Uzbekistan's economy, the impact of increasing or decreasing average wages on the
unemployment rate is a significant topic. This article focuses on studying labor market dynamics
by analyzing the relationship between average wages and unemployment rates in Uzbekistan during
the period of 2010–2023. Average wages are a key factor in ensuring economic growth and
population welfare, with their changes significantly affecting labor market stability. The study
employs modern econometric methods to examine the positive and negative effects of wage
changes on unemployment levels. The article provides empirical evidence that increasing average
wages can boost domestic consumption demand and create new job opportunities. However, it also
notes that wage increases may sometimes raise employers' costs, potentially leading to higher
unemployment.