When and for Whom Does Growth Becomes Jobless?

Mindaugas Butkus, Laura Dargenytė-Kacilevičienė, Kristina Matuzevičiūtė (), Dovilė Ruplienė and Janina Šeputienė
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Mindaugas Butkus: Institute of Regional Development, Vilnius University Siauliai Academy, 76352 Siauliai, Lithuania
Laura Dargenytė-Kacilevičienė: Institute of Regional Development, Vilnius University Siauliai Academy, 76352 Siauliai, Lithuania
Kristina Matuzevičiūtė: Institute of Regional Development, Vilnius University Siauliai Academy, 76352 Siauliai, Lithuania
Dovilė Ruplienė: Institute of Regional Development, Vilnius University Siauliai Academy, 76352 Siauliai, Lithuania
Janina Šeputienė: Institute of Regional Development, Vilnius University Siauliai Academy, 76352 Siauliai, Lithuania

Economies, 2024, vol. 12, issue 1, 1-21

Abstract: The results of previous research suggest that the elasticity of employment with respect to output is not constant within each phase of the business cycle and might depend on the maturity of that phase. Nevertheless, empirical evidence is almost non-existent. Using the unemployment gap as the proxy for the maturity of the business cycle phase, this paper seeks to determine heterogeneous elasticity across different business cycle phases. Furthermore, we aim to evaluate specific elasticities for separate demographic groups, considering gender, age, and educational attainment level, to identify the most vulnerable to jobless growth. Our specification is based on the employment version of Okun’s law, and estimates are provided for the whole EU-27 panel covering the period from 2000 to 2022. Our results suggest that elasticity is higher when the unemployment gap is positive and increasing and lower when the gap decreases, regardless of the business cycle phase. Thus, it can be argued that the possibility of growth increasing employment is very limited when the economy operates at its potential level (full employment) for all demographic groups.

Keywords: jobless growth; employment to output elasticity; business cycle; European Union (search for similar items in EconPapers)
JEL-codes: E F I J O Q (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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