Does the instability of economic development affect the elasticity of the labour market?

Despite extensive research, the estimates of changes in employment are heterogeneous in different conditions of economic development. In this study, we examined the impact of the instability of economic growth on the elasticity of the labour market in a set of EU27 member states in the period 2000Q1–2019Q4.The sensitivity of the labour market was quantified in parallel by two available methods which are used for this purpose – by calculating the values of the arc elasticity coefficient and by regression analysis. Logarithmic linear regression models were compiled according to the analysis criteria individually for each member state. By comparing the values of the obtained elasticity indicators, differences in the responses of the labour market were identified. Our results show that the heterogeneity of opinions is to some extent natural. The elasticity of the labour market determined by calculating the values of the elasticity coefficient is characterized by a high variability of values. Similarly, the values of the regression coefficient reflect the nature of the macroeconomic development of the period under review. According to our findings, the frequent short-term trends of negative economic development result in a reduced sensitivity of the labour market to the changes in economic performance, manifested by a lower employment elasticity compared to its values in economies with a stable development trend. Based on this, we formulate the connection between the elasticity of the labour market and the positive and negative economic development. We condition the sensitivity of the labour market to the changes in the trend of economic development with the occurrence of longer-lasting trends of negative economic development.

Manufacturing Output Growth and Employment in Nigeria

The Manufacturing sector of the Nigerian economy can perform better in job creation, particularly during the period of economic expansion, which did not happen in the last period of economic growth between 1981 and 2014. Consequently, it is important to understand the real relationship between growth and job creation in the sector during the period. Therefore, this study investigated the employment intensity of gross value added growth in the sector during the period of growth, using Vector Error Correction Model (VECM) with a view to providing useful statistics to facilitate policies for the development of sectoral employment strategy during the next cycle of economic growth. Previous studies have either used descriptive statistics or less robust econometric models applied to aggregate data of shorter series and did not explore the inter-sectoral relationship effect. The estimated employment elasticity of gross value added in the sector was not significant at 95 per cent confidence level, and can, therefore, not be relied upon for pin-point policy. However, the inter-sectoral and inter-temporal relationships provided significant estimates, indicating that such relationships should be taken into account in designing and developing sectoral employment strategy for the manufacturing sector. There is future scope for the extension of research to cover periods of recession, as well, for example, post COVID-19.

The COVID-19 Pandemic and its impact on the global labour market: an analysis of emerging trends (part two)

In the context of the economic crisis caused by the spread of coronavirus infection, the global labour market has faced serious challenges, on the timeliness and effectiveness of the response to which the viability of the world economy today depends. The crisis is global in nature and has a significant impact on investment, global value chains, and international trade, with serious consequences not only for the economy but also for the working-age population in all countries of the world. The global economic turmoil caused by the coronavirus pandemic requires a thorough analysis of the scale of its consequences in order to determine the most rational solutions. A situation of uncertainty about the future, fear of devastating consequences, and pessimistic forecasts were the companions of the first days of the pandemic. This article provides the first estimates of the level of unemployment and employment in various countries of the world in 2020. The article is divided into two parts due to its large volume. The first part analyzed the impact of the COVID-19 pandemic on the level of employment in various countries of the world, its consequences for the global labour market in the context of changes in the income of employees, and the amount of time worked. The features of the adaptation of the labor markets of individual countries of the world, as well as the reasons for the differences in the dynamics of the unemployment rate in different regions of the world, are revealed. The calculations of the employment elasticity coefficient for GDP for a number of countries of the world are carried out, the analysis of the obtained values is carried out. The segments of the labour market that are most affected by the impact of the pandemic are identified. The second part of the article identifies the main trends inherent in the Russian labour market before the outbreak of the epidemic and the trends whose outlines became visible during its manifestation. The essence of the main changes that occurred due to the need to adapt to new conditions is revealed. The main differences from the mechanisms of selfregulation of the labour market, which appeared during the previous economic shocks, are revealed. The impact of the pandemic on informal employment in the Russian economy is considered

Challenges of the Output-Employment Growth Imbalance in Transition Economies

The trade-off between output and unemployment has become an essential part of modern macroeconomics and is known as Okun’s law. However, in transition and emerging markets economies’ context, the output-employment nexus has a much more important role as these countries strive to significantly improve the growth dynamics of both variables. This paper aims to analyze the particularities of this relationship in selected Central- and South-Eastern European transition (and former transition) countries to find out a discrepancy between the output and employment growth. Therefore, the employment elasticity coefficients are calculated. The estimated results suggest that, in the observed period, economic growth has not contributed to satisfactory employment growth, which is commonly referred to as a “jobless growth” hypothesis. Accordingly, this paper attempts to single out the main challenges of the output-employment growth misbalance in these countries and propose adequate policy measures that could reduce it. The industrial policy that differentiates from the “one-size-fits-all” paradigm is emphasized as the most important part of macroeconomic policy in transition economies to make their development more balanced. Additionally, short-run stabilization policy, especially the one focused on the labour market, has a significant role in these economies.

Modeling Trade–Employment Elasticity Nexus: Evidence from India

The effect of trade on employment growth in India is a less-discussed issue in the international economics literature. Trade has increased the employment growth in India or not is still a debatable issue for many researchers. This study explores the impact of trade on India’s employment elasticity of growth using World development Indicator data of the World Bank and KLEMS database of India from 1982 to 2016. For this purpose, it has used the autoregressive distributed lag (ARDL) model of cointegration. The result indicates that although the share of trade in the national gross domestic product (GDP) has grown, it has failed to increase employment elasticity in the country. It may occur primarily because of the high volume of Indian imports. The share of the service sector in GDP, inflation, and foreign direct investment (FDI) are other vital factors influencing the employment intensity. Therefore, based on the empirical findings, it is suggested that policymakers should focus more on export, specifically on labor-intensive export. It will undoubtedly help to improve the employment level in the country.

Analysing Growth Paths and Employment Performance of Indian Food Processing Industry: Uncovering Dynamics at the Sub-sectoral Level

Against the backdrop of a potential productivity-employment trade-off, the performance of the Indian Food Processing Industry (FPI) and its sub-sectors, on key employment-related indicators was assessed over two decades (1998-99 to 2017-18). Based on ASI’s 4-digit level dataset on FPI’s 18 sub-sectors, the patterns of output growth were analysed and categorised into extensive, intensive, stagnant and virtuous growth paths. Pooled panel regression-based employment elasticities were estimated across sub-sectors to determine prospects of employment generation. Despite declining employment elasticities for aggregate FPI, prospects for future employment creation were found in the rapidly growing subsectors which exhibited relatively higher employment elasticity of growth. The exploration of sub-sectoral dynamics highlights the need for adequately reflecting on the heterogeneity in employment-related parameters across growth paths and suitably inform policy interventions at a juncture when there has been renewed emphasis from the Government of India to boost employment in the organised manufacturing segment.