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Jobless Growth in the Central and Eastern European Countries

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  • Özlem Onaran

Abstract

This paper estimates a labor demand equation based on the panel data of manufacturing industry in the Central and Eastern European Countries (the Czech Republic, Hungary, Poland, Slovakia, Slovenia, Lithuania, Bulgaria, and Romania) in order to test the effect of domestic factors (wages and output) and international factors (exports, imports, and foreign direct investment) on employment during the era of post-transition recovery. The findings indicate that employment does not respond to wages in more than half of the cases. The output elasticity of labor demand is mostly positive, but low, with a number of cases where employment is completely de-linked from output. An impressive speed of integration to the European economic sphere through FDI and international trade has not prevented job losses in the manufacturing industry. While there are very few cases of positive effects, insignificant effects of trade and FDI dominate the findings with some evidence of negative effects as well

Suggested Citation

  • Özlem Onaran, 2008. "Jobless Growth in the Central and Eastern European Countries," Working Papers wp165, Political Economy Research Institute, University of Massachusetts at Amherst.
  • Handle: RePEc:uma:periwp:wp165
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    File URL: https://www.peri.umass.edu/fileadmin/pdf/working_papers/working_papers_151-200/WP165.pdf
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    References listed on IDEAS

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    Cited by:

    1. Lichter, Andreas & Peichl, Andreas & Siegloch, Sebastian, 2015. "The own-wage elasticity of labor demand: A meta-regression analysis," European Economic Review, Elsevier, vol. 80(C), pages 94-119.
    2. Markus Leibrecht & Michael Klien & Oezlem Onaran, 2011. "Globalization, welfare regimes and social protection expenditures in Western and Eastern European countries," Public Choice, Springer, vol. 148(3), pages 569-594, September.
    3. Jan Babecky & Kamil Galuscak & Lubomir Lizal, 2011. "Firm-Level Labour Demand: Adjustment in Good Times and During the Crisis," Working Papers 2011/15, Czech National Bank, Research Department.
    4. Villa, Stefania., 2010. "Exploring the linkages between investment and employment in Moldova : a time-series analysis," ILO Working Papers 994553423402676, International Labour Organization.
    5. repec:ilo:ilowps:455342 is not listed on IDEAS

    More about this item

    Keywords

    Central and Eastern European Countries; employment; FDI; trade;

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand

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