Abstract
Unemployment phenomenum in Arabic countries in general in Iraq & Algeria(the example of the paper)in particular is being considered a problem of economic and social dimensions expressing clearly the weakness in economic structures and asocial mistake on the national level. It is considered a dangerous social blight which might break down human capabilities and vanish chances of growth and economic welfare.the cause of Employment represents one of the most important challenges which face Arab countries .without employment,there is a loss and uselessness for developed chances of human capital. Therefore,this paper is trying to know the effect of unemployment in economic growth in selected Arab countries (iraq&Algeria) for the period (1995-2008)throughout studying the relationship between the economic growth and the rate of change in unemployment by using law oukn.standard studies practiced in Iraq confirm the existence of variances in the field of rate of economic growth and the absence of continuous time series about unemployment and growth rates as well as the non –existence of statistical standards, so we couldnot have an accurate limitation for oukn factor and the actual rate of growth .As for Algeria, the standard analysis, for growth rates and the change in ratios of unemployment,shows that the natural rate of algerian economy is about 5.2% and it is the needed ratio to keep the present rate of unemployment stable.From this paper,we conclude that unemployment in a whole is astructural one created from the stoppage of the main sectors of production especially agriculture,transformal industry and most service activities and here the growth is considered a quantative change that could happen in two directions;the first is connected with the increase of labour productivity and the other is connected with the increase of labour supply in order to reduce the ratio of unemployment therefore; The study recommends the necessity of encouraging local and foreign investment to find employment for thegraduated and to encourage saving and follow policies that could reduce the ratio of unemployment for it is connected directly with the economic growth .
