Time–Frequency Relationship between Economic Growth, FDI, Industrialization and Employment Opportunities in Vietnam

The influence of macroeconomic indicators on employment opportunities (EO) in the host country remains a topic of debate. This study examines the lead–lag relationship between EO and macroeconomic variables (foreign direct investment (FDI), economic growth (GDP), industrialization (IND), gross capital formation (GCF), gross domestic income (GDI) and population growth (PG)) in Vietnam from 1996 to 2023 using a time–frequency approach. To achieve this, we employ several wavelet techniques, including the wavelet power spectrum, cross-wavelet transform, wavelet coherence and wavelet-based Granger causality. Our analysis identifies contagion and correlation within the frequency domain, revealing that higher time scales are associated with contagion, while lower time scales correspond to interrelations. The findings provide evidence of positive relationships between FDI, GDI, GDP, PG, GCF and EO in the medium and long run, whereas industrialization negatively impacts employment in Vietnam. Additionally, wavelet-based Granger causality analysis suggests bidirectional causality between macroeconomic variables and EO across various time and frequency bands. These findings have significant implications and offer practical recommendations for economic and labor market development.