Employment to output elasticities and reforms towards flexicurity: Evidence from OECD countries

Görg, Holger; Hornok, Cecília; Montagna, Catia; Onwordi, George E.

doi:10.1111/boer.12375

Cited by 3 publications

(1 citation statement)

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“…In most of them, economic recovery was linked to slow job growth (see, for example, OECD, (pp. 53-55, [21])), while Gorg [22] estimated the long-run employment elasticity for average OECD country to be around 0.8. This triggered many economists to examine whether economic recoveries in individual countries were jobless.…”

Section: Literature Reviewmentioning

confidence: 99%

The Nexus between Employment and Economic Growth: A Cross-Country Analysis

et al. 2023

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The main objective of this paper is to examine the relationship between employment and economic growth in developed and developing countries over the period of 1970–2019. As documented in the literature in the past, economic growth in most developing countries has been less job-generating than in developed countries, even though high economic growth is observed in most of the developing world, indicating jobless growth. Based on the Cobb–Douglas production function, we developed an employment demand model to find the employment elasticity with respect to economic growth using working hours and population as explanatory variables. The main findings of the present study reveal that the employment elasticities with respect to GDP are positive and significant in developing and developed countries. But in the developing countries, the employment elasticity is relatively very low (0.11 to 0.15) compared to the developed countries (0.43 to 0.48), which led to the conclusion that a possibility of jobless growth exists in these countries. The findings of the study imply that policymakers should focus more on employment-led growth policies instead of growth-led employment policies, especially in developing countries.

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Section: Literature Reviewmentioning

confidence: 99%

The Nexus between Employment and Economic Growth: A Cross-Country Analysis

et al. 2023

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Structural policies, FDI and economic stability effects on employment elasticities: case of emerging economies

Neifar,

Smaoui

2024

Studies in Economics and Econometrics

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Simultaneous, endogenous, and bi-directional relationship between output, labour productivity, and employment: a 3SLS estimation of the employment version of Okun equation

Butkus,

Dargenytė-Kacilevičienė,

Matuzevičiūtė

et al. 2024

JBEM

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Over the last few decades, the European Union (EU) has made progress in reducing economic disparities between Member States. However, persistent differences in employment rates remain, prompting a concerted effort to foster economic development conducive to job creation. However, the previous research does not address the impact of labour productivity on the output-employment relationship. While they provide insights into the complex interplay between productivity, output, and employment, they do not comprehensively analyse how labour productivity affects the output-employment relationship. Using panel data from 27 EU countries and the UK over 2000–2022, we aim to evaluate whether economic growth led by increased productivity can enlarge employment when the complexity of interrelationships is specified in the model. While initial estimates using pooled OLS and 2SLS methods yield insignificant results, 3SLS estimates reveal a significant mediating effect of productivity on the output-employment nexus. The results imply that raising labour productivity can boost employment prospects during economic expansions. However, the mediating effect weakens during downturns, highlighting the need for multifaceted policy interventions. These findings provide crucial insights for policymakers navigating the complex and challenging dynamics of employment and economic growth in the EU context.

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Employment to output elasticities and reforms towards flexicurity: Evidence from OECD countries

Cited by 3 publications

References 61 publications

The Nexus between Employment and Economic Growth: A Cross-Country Analysis

The Nexus between Employment and Economic Growth: A Cross-Country Analysis

Structural policies, FDI and economic stability effects on employment elasticities: case of emerging economies

Simultaneous, endogenous, and bi-directional relationship between output, labour productivity, and employment: a 3SLS estimation of the employment version of Okun equation

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