Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/328946 
Year of Publication: 
2023
Citation: 
[Journal:] Economies [ISSN:] 2227-7099 [Volume:] 12 [Issue:] 1 [Article No.:] 19 [Year:] 2024 [Pages:] 1-21
Publisher: 
MDPI, Basel
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.
Subjects: 
jobless growth
employment to output elasticity
business cycle
European Union
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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