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Jobless Growth? Okun'S Law In East Asia

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  • MAREK HANUSCH

    (The World Bank, 1818 H St NW, Washington, DC 20433, USA)

Abstract

Was economic growth in East Asia jobless? An analysis of Okun's Law in eight countries between 1997 and 2011 suggests that it was not. However, there is considerable variation across countries. Generally, the effect of growth on employment magnifies in more flexible labor markets. Yet even under tight labor regulation, economic growth affects employment, especially in its composition. Agricultural employment moves counter-cyclically, as opposed to nonagricultural employment. The effect is particularly pronounced in periods of economic crisis, suggesting that agriculture serves as a shock-absorber for workers laid off in the industrial sector. Isolating nonagricultural employment reveals a stronger relationship between growth and job creation.

Suggested Citation

  • Marek Hanusch, 2013. "Jobless Growth? Okun'S Law In East Asia," Journal of International Commerce, Economics and Policy (JICEP), World Scientific Publishing Co. Pte. Ltd., vol. 4(03), pages 1-14.
    • Handle: RePEc:wsi:jicepx:v:04:y:2013:i:03:n:s1793993313500142
    DOI: 10.1142/S1793993313500142
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    References listed on IDEAS

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    1. Olivier Blanchard & Stanley Fischer (ed.), 1992. "NBER Macroeconomics Annual 1992," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262521741, December.
    2. World Bank, 2010. "Indonesia Jobs Report," World Bank Publications - Reports 27901, The World Bank Group.
    3. World Bank, "undated". "World Bank East Asia and Pacific Economic Update 2011, Volume 2 : Navigating Turbulence, Sustaining Growth," World Bank Publications - Reports 14861, The World Bank Group.
    4. Cazes, Sandrine. & Verick, Sher. & Al Hussami, Fares., 2011. "Diverging trends in unemployment in the United States and Europe : evidence from Okun's law and the global financial crisis," ILO Working Papers 994676293402676, International Labour Organization.
    5. repec:ilo:ilowps:467629 is not listed on IDEAS
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    Cited by:

    1. Kim, Jun & Yoon, Jong Cheol & Jei, Sang Young, 2020. "An empirical analysis of Okun’s laws in ASEAN using time-varying parameter model," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 540(C).

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    More about this item

    Keywords

    Okun's Law; economic growth; unemployment; economic crisis; labor markets; agriculture; J2; J6; O4;
    All these keywords.

    JEL classification:

    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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