Page 54 - Azerbaijan State University of Economics

THE JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE, V.82, # 1, 2025, pp. 52-69

relative shares of the oil-gas sector, non-oil sector as a percentage of GDP, ILO
reported unemployment rate and total GDP in absolute terms. A review of these trends
reveals a significant shift in sectoral dynamics. From 2005 to 2010, the oil-gas sector's
contribution to GDP sharply increased—peaking above 55%—driven by large-scale
hydrocarbon investments and export revenues. However, its share has since declined,
reflecting both global energy price fluctuations and national policy shifts. In contrast,
the non-oil sector, which fell to a low of around 37% in 2007, has steadily rebounded
and overtook the oil sector again by the early 2020s, reaching approximately 60% by
2024. This trend aligns with Azerbaijan’s “Strategic Road Maps” for economic reform
and the Vision 2025 agenda, which emphasize diversification to reduce dependence
on hydrocarbons and promote development in agriculture, tourism, ICT, and
manufacturing. GDP growth has continued on an upward trajectory overall, but more
notably so in years when the non-oil sector expanded—suggesting increasing
resilience. The dramatic decline in the unemployment rate between 2000 and 2019 is
clear evidence that the reforms in this sector are moving in the right direction. The
artificial increase in unemployment during the pandemic that swept the world in 2019-
2020 stabilized below 6% in the following years.

Figure 1. Evidence from Azerbaijan

LITERATURE REVIEW
The impact of unemployment on the social, economic, and psychological lives of
individuals has been the focus of researchers for many years. Empirical research

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