Analyzing the Interaction Among Tourism, Life Expectancy, and Unemployment in Japan: Insights From Cointegration and Conditional Causality Approach

Abstract

This study explores the dynamic interconnectedness among tourism, life expectancy, unemployment, and economic growth in Japan from 1995 to 2023. Despite numerous studies on these variables individually, comprehensive analysis on their interconnections is lacking. Using Bounds testing, ARDL models, and Granger causality techniques, we reveal significant insights into these relationships. The analysis confirms a long-run co-integration among all variables, indicating a stable equilibrium over time. In the short run, tourism and life expectancy positively impact economic growth, underscoring their crucial roles in driving Japan's economy. Conversely, the link between unemployment and economic growth is negative and statistically insignificant, suggesting that short-term unemployment fluctuations do not substantially affect economic performance. Granger causality analysis shows bidirectional causality among economic growth, tourism, and life expectancy, indicating mutual reinforcement and interdependence, while unemployment reveals unidirectional causality. The findings emphasize the need for policies supporting tourism development and as strategic avenues for sustainable economic growth.