IDEAS home Printed from https://ideas.repec.org/a/vrs/reoecp/v21y2021i3p291-308n5.html
   My bibliography  Save this article

Does the instability of economic development affect the elasticity of the labour market?

Author

Listed:
  • Daňová Monika
  • Vozárová Ivana Kravčáková

    (University of Presov, Faculty of management, Konštantínova 16, 080 01Prešov, Slovakia)

Abstract

Despite extensive research, the estimates of changes in employment are heterogeneous in different conditions of economic development. In this study, we examined the impact of the instability of economic growth on the elasticity of the labour market in a set of EU27 member states in the period 2000Q1–2019Q4.The sensitivity of the labour market was quantified in parallel by two available methods which are used for this purpose – by calculating the values of the arc elasticity coefficient and by regression analysis. Logarithmic linear regression models were compiled according to the analysis criteria individually for each member state. By comparing the values of the obtained elasticity indicators, differences in the responses of the labour market were identified. Our results show that the heterogeneity of opinions is to some extent natural. The elasticity of the labour market determined by calculating the values of the elasticity coefficient is characterized by a high variability of values. Similarly, the values of the regression coefficient reflect the nature of the macroeconomic development of the period under review. According to our findings, the frequent short-term trends of negative economic development result in a reduced sensitivity of the labour market to the changes in economic performance, manifested by a lower employment elasticity compared to its values in economies with a stable development trend. Based on this, we formulate the connection between the elasticity of the labour market and the positive and negative economic development. We condition the sensitivity of the labour market to the changes in the trend of economic development with the occurrence of longer-lasting trends of negative economic development.

Suggested Citation

  • Daňová Monika & Vozárová Ivana Kravčáková, 2021. "Does the instability of economic development affect the elasticity of the labour market?," Review of Economic Perspectives, Sciendo, vol. 21(3), pages 291-308, September.
    • Handle: RePEc:vrs:reoecp:v:21:y:2021:i:3:p:291-308:n:5
    DOI: 10.2478/revecp-2021-0013
    as

    Download full text from publisher

    File URL: https://doi.org/10.2478/revecp-2021-0013
    Download Restriction: no
    File URL: https://libkey.io/10.2478/revecp-2021-0013?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. repec:srs:journl:tpref:v:3:y:2012:i:1:p:26-41 is not listed on IDEAS
    2. Ioannis A. Katselidis, 2019. "Institutions, Policy and the Labour Market: The Contribution of the Old Institutional Economics," Economic Thought, World Economics Association, vol. 8, pages 13-30, December.
    3. Junankar, Pramod N. (Raja), 2013. "Is there a Trade-off between Employment and Productivity?," IZA Discussion Papers 7717, Institute of Labor Economics (IZA).
    4. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
    5. World Bank, 2018. "Moving for Prosperity," World Bank Publications - Books, The World Bank Group, number 29806, December.
    6. International Labour Office., 2011. "Global employment trends 2011 : the challenge of a jobs recovery," Global Employment Trends Reports 994619083402676, International Labour Office, Economic and Labour Market Analysis Department.
    7. Ivan KITOV & Oleg KITOV, 2012. "Modeling Unemployment And Employment In Advanced Economies: Okun’S Law With A Structural Break," Theoretical and Practical Research in the Economic Fields, ASERS Publishing, vol. 3(1), pages 26-41.
    8. Mohamad Ahmad Abou Hamia, 2020. "Are developing countries accumulating sufficient total factor productivity to sustain their economic growth and job creation? Empirical evidence from the Middle East and North Africa region," Review of Development Economics, Wiley Blackwell, vol. 24(3), pages 1102-1127, August.
    9. Easterly, William R. & Wetzel, Deborah L., 1989. "Policy determinants of growth : survey of theory and evidence," Policy Research Working Paper Series 343, The World Bank.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Andrei, Jean & Saša, Stefanovic, 2011. "Especially vulnerable groups in EU and Serbian labor market," MPRA Paper 35285, University Library of Munich, Germany, revised 17 Oct 2011.
    2. Renelt, David, 1991. "Economic growth : a review of the theoretical and empirical literature," Policy Research Working Paper Series 678, The World Bank.
    3. Themba G Chirwa & NM Odhiambo, 2019. "An Empirical Test Of Exogenous Growth Models: Evidence From Three Southern African Countries," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 64(220), pages 7-38, January –.
    4. Chirwa, Themba G & Odhiambo, Nicholas M, 2016. "The drivers of real sector growth in Malawi: an empirical investigation," Working Papers 20037, University of South Africa, Department of Economics.
    5. Honeck, Dale, 2012. "LDC export diversification, employment generation and the "green economy": What roles for tourism linkages?," WTO Staff Working Papers ERSD-2012-24, World Trade Organization (WTO), Economic Research and Statistics Division.
    6. Joshua Graff Zivin & Matthew Neidell, 2013. "Environment, Health, and Human Capital," Journal of Economic Literature, American Economic Association, vol. 51(3), pages 689-730, September.
    7. Skribans, Valerijs, 2012. "European Union Economy System Dynamic Model Development," MPRA Paper 49170, University Library of Munich, Germany.
    8. Marinov, Eduard, 2013. "Кризата В Ес – Финансови Рискове За Африка [The EU Crisis – Financial Risks for Africa]," MPRA Paper 60315, University Library of Munich, Germany.
    9. Ronald Labonté & Vivien Runnels & Michelle Gagnon, 2012. "Past Fame, Present Frames and Future Flagship? An Exploration of How Health is Positioned in Canadian Foreign Policy," Administrative Sciences, MDPI, vol. 2(2), pages 1-24, April.
    10. Levine, Ross & Renelt, David, 1991. "Cross-country studies of growth and policy : methodological, conceptual, and statistical problems," Policy Research Working Paper Series 608, The World Bank.
    11. Marinov, Eduard, 2012. "Кризата В Европа – Последици За Африка [The EU Crisis – Impact on Africa]," MPRA Paper 60296, University Library of Munich, Germany, revised 2012.
    12. Cullati, Stéphane, 2014. "The influence of work-family conflict trajectories on self-rated health trajectories in Switzerland: A life course approach," Social Science & Medicine, Elsevier, vol. 113(C), pages 23-33.
    13. Themba G. Chirwa & Nicholas M. Odhiambo, 2017. "Sources of Economic Growth in Zambia: An Empirical Investigation," Global Business Review, International Management Institute, vol. 18(2), pages 275-290, April.
    14. Stefania Villa, 2005. "Determinants of growth in Italy. A time series analysis," Quaderni DSEMS 24-2005, Dipartimento di Scienze Economiche, Matematiche e Statistiche, Universita' di Foggia.
    15. Ghani, Ejaz, 1992. "How financial markets affect long run growth : a cross country study," Policy Research Working Paper Series 843, The World Bank.
    16. Njang Vera Anweh & Ndamsa Dickson Thomas, 2017. "Employment Vulnerability in Cameroon's Private Sector," Working Papers 333, African Economic Research Consortium, Research Department.
    17. Serhan Cevik, João Tovar Jalles, 2023. "Eye of the Storm: The Impact of Climate Shocks on Inflation and Growth," Working Papers REM 2023/0276, ISEG - Lisbon School of Economics and Management, REM, Universidade de Lisboa.
    18. William Easterly, 1989. "Policy Distortions, Size of Government, and Growth," NBER Working Papers 3214, National Bureau of Economic Research, Inc.
    19. Li, Bing & Liu, Chang & Sun, Stephen Teng, 2021. "Do corporate income tax cuts decrease labor share? Regression discontinuity evidence from China," Journal of Development Economics, Elsevier, vol. 150(C).
    20. Chirwa Themba G. & Odhiambo Nicholas M., 2016. "Macroeconomic Determinants of Economic Growth: A Review of International Literature," South East European Journal of Economics and Business, Sciendo, vol. 11(2), pages 33-47, December.

    More about this item

    Keywords

    economic growth; elasticity; employment; labour market; stability of development trend;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • J40 - Labor and Demographic Economics - - Particular Labor Markets - - - General
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:vrs:reoecp:v:21:y:2021:i:3:p:291-308:n:5. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: https://www.sciendo.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.