The Impact of Foreign Direct Investments on Labor Market Indicators of the Philippines using the Granger Causality

This study examines the impact of foreign direct investment (FDI) on employment growth in the Philippines. The study investigates how FDI affects labor market indicators, including labor force participation, employment, unemployment, and underemployment rates in the long run. Using the yearly data from the World Bank and Philippines Statistics Authority from 1991 to 2022 and the Granger Causality Test, the findings suggest that the number of observations and lags of FDI to labor force participation rate and FDI to employment rate show a significant impact. Nevertheless, the Granger Causality suggests that FDI positively affects both labor force participation and employment rates in the long run and emphasizes the importance of attracting FDI for stimulating employment growth and overall economic development.