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Jobless growth ? Okun's law in East Asia

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  • Hanusch, Marek

Abstract

Was economic growth in East Asia jobless? This paper addresses this question using data from eight East Asian countries during the period between 1997 and 2011 to estimate the Okun's Law Coefficient, which captures the relationship between growth and employment. The analysis suggests that growth was not jobless. However, there is considerable variation across countries. Generally, the effect of growth on employment tends to magnify under more flexible hiring and firing rules. Yet even where labor markets are more tightly regulated, economic growth affects employment, not necessarily in the aggregate but in its composition. There is evidence that agricultural employment moves counter-cyclically, as opposed to non-agricultural employment. The effect is particularly pronounced in periods of economic crisis, suggesting that agriculture may serve as a shock-absorber for workers laid off in the industrial sector. Isolating non-agricultural employment reveals a stronger relationship between growth and job creation.

Suggested Citation

  • Hanusch, Marek, 2012. "Jobless growth ? Okun's law in East Asia," Policy Research Working Paper Series 6156, The World Bank.
  • Handle: RePEc:wbk:wbrwps:6156
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    References listed on IDEAS

    as
    1. Roger Perman & Christophe Tavera, 2005. "A cross-country analysis of the Okun's Law coefficient convergence in Europe," Applied Economics, Taylor & Francis Journals, vol. 37(21), pages 2501-2513.
    2. repec:ilo:ilowps:467629 is not listed on IDEAS
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    Cited by:

    1. Antal, Miklós, 2014. "Green goals and full employment: Are they compatible?," Ecological Economics, Elsevier, vol. 107(C), pages 276-286.

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    Keywords

    Labor Markets; Labor Policies; Labor Management and Relations; Labor Standards; Work&Working Conditions;

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