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Business & Economics

CHANGES IN GDP AND THE EMPLOYMENT AND UNEMPLOYMENT IN THE EUROPEAN UNION
Stanislaw Gedek, Tomasz Misiak, Grzegorz Mentel

ABSTRACT. The aim of the paper is to identify statistical correlation between the diversification of the unemployment and the employment and the changes in GDP in the countries of the European Union. Basing on the theoretical models of the impact of GDP on the unemployment and the employment there were conducted empirical estimations of the econometric models parameters for panel data. The tests of stationarity showed that the level of GDP, the unemployment rates and the number of the employees are not stationary, integrated of order 1, what determines the methodology of analysis.
A SUR method was used for the estimation of the theoretical model parameters. The assumptions of the direction of the variables influence were verified by Granger Causality Test.
The effect of hysteresis was statistically significant in the models used for all the groups of UE countries. The estimated jobless growth rates have the value: EU23 (1.6%), EU15 (0.6%), EU13 (3.4%), DCC (0.9%). The authors indicate a significant diversification in the jobless growth rates between "the old" and "the new" EU. A theoretical model of increment in the unemployment rates was proposed - an extended version of difference Okun's Law with the effect of the hysteresis. The results of the empirical research can be used in the drafting of macroeconomic policy and also for benchmarking against the results of other researchers.

KEYWORDS: jobless growth rate, difference version of Okun's Law, hysteresis of the unemployment rates.

JEL classification: E24, J65, C23.