TERM PAPER (Proposal)

Group:
Abu Naim Bukhary- 21105016
Shafkat Hasnath- 21105014

Title of the research paper

Do bulls and bears of the stock market affect the unemployment rate in the country?

Objectives of the Research

1. Unemployment is one of the major problems across the whole world and the stock market
being the cause in such scenarios is an interesting thing to research on. Increase or decrease of
the ratio of unemployment is affected by the ups and downs in the stock market. Besides
understanding how the stock market affects the job market as well. With such ups and downs in
the stock market, the job market expands or shrinks according to the situation. The relationship
between the stock market and unemployment holds a rise in unemployment usually indicates a
drop in interest rates, which is quite affirmative for stocks, as well as a drop in future corporate
earnings and dividends, which is negative for stocks.

2. Our aim is to understand and discover how the stock market affects the economy of the
country by transpiring to unemployment. Also to mention about the fact that the job sector of a
country is highly impacted by the oscillation of the stock market.

Research Methodology

We will be using one type of CAUSAL ANALYSIS specifically QUASI EXPERIMENT to see if
the unemployment rate in the country is affected by bulls and bears of the stock market. Causal
regression enables us to work with multiple variables and establish a theory behind the reason
for the shifts. For this experiment we are going to use Difference in Differences (DID). DID is
used to see the effect of new rules/policies , here we will see the effect of ups and lows of the
stock market on the unemployment rate. How the unemployment rate stays during a steady
stock market and how it's affected during the bulls and bears.
In our regression equation the Unemployment rate will be the dependent variable and shift in
stock markets will be the independent variables

Yi(unemployment rate) = β0 + β1(bulls) + β2 (bears) + ε(traffic)

dependent variable population y intercept independent variables error term
Data and information sources

1. Stock market data considering S&P 500, NASDAQ and Dow 30 :

Link : https://finance.yahoo.com/
2. Unemployment data
Link:
https://tradingeconomics.com/united-states/unemployment-rate?fbclid=IwAR1tmZJJ9elfv
iy1W7NsxAj3Vy9fDTlrhMfG7KeLGB0hiJsj8hdu8pRDpMM

https://www.bls.gov/charts/employment-situation/civilian-unemployment-rate.htm?fbclid=I
wAR0NAQlCKIRTzkVwE0Aq3Oa0bNlFuKICSPUGRJgR9tsw4TUZoXdB5ey93WE
3. Private sector job gains and losses
Link:
https://www.bls.gov/news.release/cewbd.t01.htm?fbclid=IwAR3ijppGnrTQpJyt9q0J_NgU
J9gAp-tY_CPu0rB4jz-my2DaqJ2UscuSCjM