The Okun’s Law in the Regional Labour Markets in Poland

Abstract

In the article we attempt to analyse unemployment in regional labour markets in Poland. According to the well-known Okun’s Law changes in unemployment are associated with changes in economic growth. We have examined whether the law is valid in the Polish regional labour markets. We have calculated Okun’s coefficients in the regions of Poland provinces and then estimated these coefficient for the groups of regions using seemingly unrelated regressions (SUR) method, which allows to take account for common shocks. The results show that the later approach (grouping regions) gives a better estimate, because it includes the correlation of random shocks in different provinces. Following the work of Perman, Tavera (2005), the groups of regions with the same values of Okun’s coefficients are treated as “clubs” of provinces with similar macroeconomic structure. Research have revealed the existence of two such clubs: one composed of regions in the western part of the country and the second one consisting of provinces from the eastern part of the Poland.

Impact of Unemployment on Socio-Economic Development of Poland and Ukraine: Governance Aspects

“…Consequently, the use of Formula (2) makes it possible to quantify the impact of unemployment on the cyclicality of the national economy. Hence, the relationship between the unemployment rate and output in Poland at the national level using Formula (1) was investigated by Bartosik (2020) based on statistical data from 1996-2018, and at the regional level by Kliber (2017).…”

Untitled

“…Consequently, the use of Formula (2) makes it possible to quantify the impact of unemployment on the cyclicality of the national economy. Hence, the relationship between the unemployment rate and output in Poland at the national level using Formula (1) was investigated by Bartosik (2020) based on statistical data from 1996-2018, and at the regional level by Kliber (2017).…”