EMPLOYMENT RATE AND ECONOMIC GROWTH: THE CASE OF TRANSITION COUNTRIES
This paper investigates the effects of the employment rate on economic growth during the transition process. We start with the mainstream growth econometrics approach that controls for convergence and, in order to control for heterogeneity of countries in our sample, we control our estimates for...
Main Authors: | , , |
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Format: | Article |
Language: | deu |
Published: |
Faculty of Economics University of Rijeka
2023-06-01
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Series: | Zbornik radova Ekonomskog fakulteta u Rijeci : časopis za ekonomsku teoriju i praksu |
Subjects: | |
Online Access: | https://www.efri.uniri.hr/upload/14072023_10-Tica_et_al-2023-1.pdf |
Summary: | This paper investigates the effects of the employment rate on economic growth
during the transition process. We start with the mainstream growth econometrics
approach that controls for convergence and, in order to control for heterogeneity
of countries in our sample, we control our estimates for transition-specific
indicators such as initial conditions (pre-transition history), governance quality,
privatisation methods as well as various indicators of institutional development.
We use a wide range of model specifications using fixed effects as well as Bayesian
averaging to address the problem of model uncertainty in 24 countries during the
1995-2019 period. Contrary to the neoclassical growth model assumptions, we
find that the employment rate is one of the most important growth factors even
after three decades. Results also indicate that convergence (initial level of
development) robustly explains a part of cross-country growth rate differentials,
while the effects of the initial conditions (pre-transition history) are robust, but
fade out after the first decade. We do not find evidence that physical capital and
population growth explain the growth in our sample. |
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ISSN: | 1331-8004 1846-7520 |