Background/ Objectives: The employment growth rate reflects the socioeconomic development of a country. The service sector makes an important part of the economy in most countries. Service sectors are the top rising sectors in Bangladesh. Specially provides employments, inputs, and public services for the economy. A forecast of employment rate in service sectors can help the implementation of policies, strategies, and budgets to encourage entrepreneurs of service sectors within the target range. One of the most common methods of forecasting this is the ARIMA or autoregressive integrated moving average model applied in this study.
Methods/ Statistical analysis: The objective of the study is to give details of the ARIMA model to forecast the employment growth rate in service sectors (2019–2028). Secondary data analysis and forecast model are done for the available year and employment data extracted from WDI, world bank database, and Bangladesh Labor Bureau website and it has been collected over 28 years. We applied Augmented Dickey-Fuller (ADF), Phillips–Perron (PP), and Kwiatkowski–Phillips–Schmidt–Shin (KPSS) tests to investigate the stationary character of the data. Stata and R studio software was applied to build a structure of the ARIMA method to model and forecast the employment growth rates.
Findings: In this study, the employment of Bangladesh from 1991 to 2018 is modeled using ARIMA (P, I, Q) methodology. The forecast of the sample period (1991–2018) showed accuracy by the selected the best two ARIMA (0, 2, 0) and ARIMA (1,1,0) model. The model was validated by the lowest values of AIC and BIC, fewer P-values, graphical arrangements of ACF and PACF plots. Both of the post sample forecasts with ARIMA (0,2,0) and (1,1,0) showed an increasing trend of (2019–2028) employment growth rate in service sectors. If the increasing trend persists, according to ARIMA (0.2.0) the forecast employment rate for 2028 is 43.33% in the service sectors. On the other hand, the employment growth rate in service sectors of Bangladesh would be approximately 47.28% in 2028, based on another ARIMA (1,1,0). Statistical outcomes illustrate that Bangladesh’s employment growth rate in service sectors is an increasing trend that will continue growing in the future.
Improvements/Applications: These findings will help policymakers, researchers, and academicians to formulate employment-related strategies and policies more precisely.