Abstract:
Nowadays, foreign employment has emerged as a solution for the unemployment crises, the need of foreign exchanges and economic growth for developing countries. This study intends to find out the behavioral relationship between the foreign employment and economic growth of Sri Lanka. To test this relationship, the time series data were considered during the period of 1977 to 2014. While the remittances of foreign employment were exploited as explanatory variable and the gross domestic product in constant price was considered as explained variable. In this study, the multiple regression model was used to test the relationship between dependent and independent variables. According to this model the R- squared was 0.99 and its Durbin Watson test statistic was 1.198, therefore this model was fitted very well. In the meantime the coefficient of the foreign employment factor in the estimated model was 0.834510 and its ‘t’ statistic was 16.743 (0.000), therefore this factor was significantly impacted on the dependent variable. Finally this study concluded that the foreign employment had positive behavioral relationship on the gross domestic product of Sri Lanka.
