Published : 2010-05-13

Dynamic Relations in Polish Labour Market Using SVECM Model

Robert Pater



Abstract

In the article dynamic relations between real GDP and chosen variables in the labour market has been analysed. These variables are: employment, real wages, vacancies and number of economically active people. To achieve this the structural vector error correction model (SVECM) has been used. Long-run labour demand function has been estimated. The result of the influence of macroeconomic shocks on the endogenous variables of the model has also been calculated. The shocks included are: aggregated demand shock, technology shock, demographic shock, mismatch shock and wages shock. Based on the used methodology the variables of the model were decomposed according to the influence of particular shocks. The innovation of the article was including vacancies in the model. It enabled the estimation of the influence of mismatch between labour demand and supply on each of the modelled variables. The estimation showed that in the short-run the greatest influence on the employment has aggregated demand shock. However, technology shock and mismatch shock also explain certain proportion of the variance of this variable. In the long-run wages shock and demographic shock become more important. The results also showed some permanent effects of mismatch shock on employment, which may be the result of structural unemployment. Another conclusion is procyclicality of classical real wages cycles and anticyclicality of their growth cycles. Moreover, the analysis showed the existence of the added-worker and discouraged-worker effects in Polish labour market.

Keywords:

SVECM model, labour market model, employment creation, abour demand disturbances



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Pater, R. (2010). Dynamic Relations in Polish Labour Market Using SVECM Model. Regional Barometer. Analyses & Prognoses, (1 (19), 11–26. https://doi.org/10.56583/br.1378

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University
Akademia Zamojska
ul. Pereca 2, 22-400 Zamość
tel. 84 638 34 44
fax 84 638 35 00
e-mail: rektorat@akademiazamojska.edu.pl
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