The Influence of the Economic Growth Process on Romanian Employment

6 Kapos [9], analysing employment intensity (the effect of economic growth on employment or the employment intensity of economic growth), between 1991 and 2003, for 160 countries, from different regions of the world, shows that, at global level, employment elasticity has decreased, fact that reflects the employment performance following the global economic slowdown. According to the author’s estimations, at regional level, the highest employment elasticity is to be found in Africa and the Middle East, but here the labour productivity growth is extremely reduced. Therefore, the number of poor workers has continued to increase in this region. The analysis of employment elasticity together with economic growth, productivity growth, unemployment and poverty evolution shows that, in the regions in Asia and the Pacific and particularly in East Asia, the rapid economic growth has led to important earnings in labour productivity as well as in employment growth, contributing to the increase in living standards. Other studies state that employment elasticity had a growth tendency from one period to the other. Thus, Padalino and Vivarelli [13] catching the effect of the technological changes on employment intensity show that employment elasticity increased in the 1980-1994 period compared to the one between 1960 and 1973 (period in which the main production method was Fordist). In the same study, the authors notice significant differences in employment elasticity between the big seven countries of the OECD (employment elasticity in Japan of +0.1, and in Germany of +0.78). This fact, the authors say, does not prove dissociation between economic growth and employment, but rather the fact that the effect of economic growth on employment differs enormously from one country to another. Examining the effect of economic growth on employment in 11 Transition Economies in Central and Eastern Europe (CEE) and the Commonwealth of Independent States (CIS) for the period 1989-1998, Saget [15] identifies three types of elasticity patterns in the region. First of all, in countries such as Poland, Hungary and Slovenia, employment growth appears closely linked with GDP growth, as evidenced by relatively high employment elasticity. In the second group, including the Baltic States, the Slovak Republic and the Russian Federation, the elasticity is much lower. In the third group (Bulgaria, Romania and Ukraine), a statistically significant relationship between employment and GDP was not identified. The authors consider the high share of national output in the informal economy responsible for the weak relationship between employment and economic growth. Although some studies claim that in economy the phenomenon of “jobless growth” emerges, the authors of other studies struggle to provide empirical evidence that prove the contrary. Thus, Döpke [4] demonstrating the close relationship between aggregate production growth and employment growth, shows that the relatively poor performance of employment in Europe (compared to the USA) is partially due to the low employment intensity. Through the comparative analysis of the data for the 1971-1999 period, on the OECD countries, the author proves that the countries which are successful in the fight against unemployment, for example the USA, generally have a lower unemployment threshold. On the other hand, the results of the study suggest that there is no evidence that supports the existence of jobless growth. The explanation for the existence of a different employment intensity, must be looked for in many directions. The rhythm of job creation in relation to economic growth can be explained by the type of economic growth (extensive or intensive), which has suffered important changes lately. The GDP growth (aggregate production) as reaction to the aggregate demand growth can be achieved in different ways: either the quantity of inputs (labour force, capital etc) increases and then we talk about extensive growth, or the production factors productivity increases (intensive growth), or a combination of the two possibilities [16]. It is stated, in the economic literature, that the shortage of labour demand is based on the fact that economic growth and development predominantly take place based on the intensive factors, labour productivity having an important role. Conceptually, employment intensity of economic growth (as measured by the elasticity of employment with respect to output) is inversely related to labour productivity. However, if employment-intensive growth were achieved through higher growth of labour-intensive sectors, it would not necessarily imply the reduction of labour productivity altogether, being able to combine high elasticity of employment with some increase in labour productivity. On the other hand, the studies [5] prove the fact that there is no contradiction between, on the one hand, the necessity to increase labour productivity in the sectors that take part in the international competition, and on the other hand, the necessity for the share of the sectors with a slower productivity growth to increase. It is important for the wealth resulted from increasing productivity in the first sectors to be distributed to the benefit of the entire society. Recent analyses [4] highlight that the different employment intensity is due to the factors that influence it: relative cost of labour (especially for unskilled work) and capital, working time including part-time work, the sectoral composition of employment, technological progress, the institutions specific to the labour market, the micro and macroeconomic context, etc. As far as the institutions specific to the labour market are concerned, as factor which influences employment intensity, Flaig and Rottmann [6], prove that these have an important role in changing employment intensity (expressed by the employment threshold – the minimum growth rate which keeps employment constant). The authors demonstrate that, for a sample of 17 OECD countries, between 1971 and