Economic growth, formal employment and productive structure
DOI:
https://doi.org/10.55444/2451.7321.2022.v60.n1.37682Keywords:
employment-output elasticity, productive structure, employment-exchange rate elasticity, ARDLAbstract
The relationship between employment and economic growth is of great interest to the economic literature. Although the procyclicality of employment is well known, estimates of elasticities for countries such as Argentina are scarce. Using an autoregressive distributed lagged model (ARDL), this paper estimates the elasticity of formal employment with respect to output and the real exchange rate from administrative records for the period 2007-2019. The results indicate procyclicality is small in the short run but considerable in the long run. Additionally, when dividing employment into productive sectors (following two different levels of disaggregation), we find non-trivial sectoral patterns that point to the importance of the productive structure in the generation of formal employment. The sensitivity to the exchange rate, although small at the aggregate level, adopts relevant values in sectors whose productive insertion makes them typically net exporters or importers. Finally, we provide evidence of different elasticities according to the size of the firms and the sign of the movements in output.
Reception date: 19/05/2022
Acceptance date: 15/07/2022
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