Laura Dargenytė-Kacilevičienė

Research background: Hospital bed density and national secondary pupil–teacher ratios capture only limited aspects of service capacity, and their associations with subsequent GDP per capita growth may vary with population health and educational attainment. Purpose of the article: This study examines the conditional associations of hospital bed density and secondary pupil-teacher ratios with subsequent annualised GDP per capita growth over three-, five-, and ten-year horizons, and assesses whether these associations vary with initial life expectancy and adult schooling, respectively. Methods: The analysis combines public international data in horizon-specific panels of 112, 111, and 101 economies, containing 1,461, 1,322, and 920 economy–origin-year observations. Four specifications use the same observations within each horizon, country and origin-year fixed effects, initial controls, and separately estimated interactions. Conditional contrasts are reported with country-clustered confidence intervals for observed moderator support, and choices for covariance, source, timing, sample, and specification are examined. Findings & value added: The main results provide no clear statistical evidence of a relationship between hospital bed density or secondary pupil–teacher ratios and subsequent GDP per capita growth. They also do not establish whether these relationships depend on life expectancy at birth or on adult schooling. Some alternative analyses yield statistically significant results, but the findings are not consistent across specifications. The study extends research on health, education, and economic growth by distinguishing service capacity from the population’s health and educational attainment. By examining these relationships over three-, five-, and ten-year periods, it assesses whether the growth associations of service capacity vary with population characteristics and the time horizon considered. This provides evidence on an important distinction: the economic role of health and education cannot be assessed solely through counts of beds and teachers.

Over the last few decades, the European Union (EU) has made progress in reducing economic disparities between Member States. However, persistent differences in employment rates remain, prompting a concerted effort to foster economic development conducive to job creation. However, the previous research does not address the impact of labour productivity on the output-employment relationship. While they provide insights into the complex interplay between productivity, output, and employment, they do not comprehensively analyse how labour productivity affects the output-employment relationship. Using panel data from 27 EU countries and the UK over 2000–2022, we aim to evaluate whether economic growth led by increased productivity can enlarge employment when the complexity of interrelationships is specified in the model. While initial estimates using pooled OLS and 2SLS methods yield insignificant results, 3SLS estimates reveal a significant mediating effect of productivity on the output-employment nexus. The results imply that raising labour productivity can boost employment prospects during economic expansions. However, the mediating effect weakens during downturns, highlighting the need for multifaceted policy interventions. These findings provide crucial insights for policymakers navigating the complex and challenging dynamics of employment and economic growth in the EU context.

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.

Objective: The objective of the article is to assess the impact of economic growth on employment mediated by international trade and regulation, considering the gender-, age- and educational attainment levels of employed in the European Union (EU). Research Design & Methods: The analysis incorporates the role of international trade and its interaction with regulation in 27 European Union countries over the 2000-2020 period, utilizing an unbalanced panel dataset. The mediating effect of international trade on employment elasticities specific to gender, age, and educational attainment levels is assessed by introducing multiplicative terms involving changes in Gross Domestic Product (GDP) and various international trade variables. A three-way interaction model is employed to capture the mediating effects of international trade and regulation, i.e. labour market and business regulation, on the relationship between output and employment in the EU. Findings: The findings suggest that the increased imports and exports in the EU are generally associated with a decline in the employment response to economic growth, especially for youth. Notably, we may observe a possible positive impact in the context of women’s employment response to economic growth. The results confirm the significance of regulation and international trade in strengthening the impact of economic growth on employment, especially for highly educated 40-64-year-old women. Implications & Recommendations: The study revealed the mediating effect of international trade and regulation on the relationship between output and employment in the EU. The findings indicate that global trade plays an important role in decreasing the employment response to economic growth. Policymakers should focus on creating adaptive regulatory frameworks to address the relationship between regulation and the demand for skilled and unskilled labour as the reaction to output growth when a high volume of imports and exports occurs in a country. Strategies to mitigate the negative impact of international trade on employment reaction to economic growth need to address issues related to labour productivity growth, emphasising ongoing research on the mediating effect of total factor productivity. Contribution & Value Added: Our contribution is to complement the previous research by considering regulation as the factor which simultaneously to international trade can boost the impact of economic growth on gender-, age-, and educational attainment level-specific employment in the EU.

Until recently, the output-unemployment relationship (Okun’s coefficient) was believed to follow two regimes, implying a uniform effect of expansionary fiscal policy on unemployment during economic booms and declines. However, research by Oh (2018) and Donayre (2022) introduced a three-regime approach, suggesting this relationship varies over different economic phases. Building on this, we propose a multinomial Okun’s coefficient model using a gap model and quantile regression to estimate the coefficient at various unemployment levels. Our findings reveal that Okun's coefficient is significantly higher during severe recessions and lower at the onset of economic decline compared to the two-regime model. This indicates that the effectiveness of expansionary fiscal policy in reducing unemployment is limited when implemented at the start of a recession and is more effective during severe recessions, suggesting a need to re-evaluate the timing of such policies.