Kiel Working Papers, Kiel Institute for World Economics
No 1021:
The "Employment Intensity" of Growth in Europe
Jörg Döpke
Abstract: The paper elaborates on the employment intensity of
growth. Previous evidence regarding this question is surveyed. Empirical
results concerning Europe and selected other industrial countries reveal
that the cyclical link between unemployment and growth is still stable in
the nineties. However, the relation strongly depends on the variable chosen
to represent the labor market situation. Test on an asymmetric relation
leads to ambitious results. Cross-country and panel evidence suggest that
the employment intensity of growth is influenced by the countryÂ’s wage
setting process, the share of the service sector, and labor market
flexibility. A clear-cut importance of exchange rate volatility cannot be
found. Some conclusions with regard to economic policy are drawn.
Keywords: Unemployment, Employment, OkunÂ’s law, European monetary union; (follow links to similar papers)
JEL-Codes: E2; C2; (follow links to similar papers)
46 pages, January 2001
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