Employment Growth Rates Research Articles

MSMEs: Its Role in Inclusive Growth in India

To foster economic development, generation of jobs, reduction in poverty and promotion of equality, the role of micro-, small- and medium-sized enterprises (MSMEs) becomes crucial in every economy of the world. The MSME sector encourages equitable distribution and inclusive growth as an engine of economic progress. MSMEs have the highest employment growth rate, which has a positive impact on export and industrial growth. The primary objective of this article is to analyse MSMEs’ performance and their contribution to India’s inclusive prosperity. Over the previous two decades, the Indian economy has performed well but the rewards of this expansion have not been distributed fairly. The impact of MSMEs on various socio-economic groups and the engagement of women in India has been studied using a variety of metrics, including employment generation, regional industry distribution and entrepreneurship. The information used in this article was gathered from secondary sources such as Annual MSMEs Reports and the Handbook of Indian Economy Statistics. According to the study’s findings, the MSME sector contributes to inclusive growth in India by offering substantial job possibilities, ensuring that industries are distributed fairly and promoting entrepreneurship among women from underprivileged backgrounds. ‘Make in India’, ‘Digital India’ and other initiatives have created new possibilities for the MSME sector to grow significantly during the coming 10 years.

Committing to Grow: Privatizations and Firm Dynamics in East Germany

This paper investigates a unique policy designed to maintain employment during the privatization of East German firms after the fall of the Iron Curtain. The policy required new owners of the firms to commit to employment targets, with penalties for non-compliance. Using a dynamic model, we highlight three channels through which employment targets impact firms: distorted employment decisions, increased productivity, and higher exit rates. Our empirical analysis, using a novel dataset and instrumental variable approach, confirms these findings. We estimate a 22% points higher annual employment growth rate, a 14% points higher annual productivity growth, and a 3.6% points higher probability of exit for firms with binding employment targets. Our calibrated model further demonstrates that without these targets, aggregate employment would have been 15% lower after 10 years. Additionally, an alternative policy of productivity investment subsidies proved costly and less effective in the short term.

The impact of agricultural minimum wages on worker flows in South Africa

AbstractThis paper is the first to provide estimates of how minimum wages affect worker flows and employment growth rates in an employment scarce developing country context. We investigate the effects of a large, exogenous increase in agricultural minimum wages in South Africa. We find that changes occurred primarily among non‐seasonal workers. Non‐seasonal agricultural employment growth decreased in the initial periods after the minimum wage hike. This was mainly driven by slower rates of entry. The effect on the rate of entry decreases over time. While farms also responded by shedding non‐seasonal workers at higher rates, this negative effect was limited to 1 year directly after the minimum wage hike. Employment growth recovers 4 years after the policy shock, indicating that firms adjusted relatively quickly despite the large legislated minimum wage increase. Seasonal employment growth and rates of entry and exit of seasonal workers were for the most part unaffected. Descriptive statistics, however, suggest a slight compositional change among seasonal workers: Farms replaced the worst paid seasonal workers with other low‐income workers who were slightly better paid and presumably more productive.

Employment Trends and Relative Influence of U.S. Retail Subsector Employments on GDP

This paper studies employment trends of the U.S. retail industry and its twelve subsectors for the period 1998 through 2021. The retail subsectors are: motor vehicle and parts dealers (NAICS 441), furniture and home furnishing stores (NAICS 442), electronics retail stores (NAICS 443), building material retail stores (NAICS 444), food and beverage stores (NAICS 445), health and personal care retail stores (NAICS 446), gasoline stations (NAICS 447), clothing and accessories retail stores (NAICS 448), sporting goods, hobby goods, books, and music retail stores (NAICS 451), general merchandise stores (NAICS 452), miscellaneous retail stores (NAICS 453), and nonstore retail stores (NAICS 454). Comparing the pre-pandemic (2017-19) and post-pandemic (2019-21) employment growth rates, this study finds nonstore retailers (NAICS 454) and Food and beverages stores (NAICS 445) to be the most pandemic-proof subsectors in terms of retail employment. Besides multi-jurisdictional employment trends of this industry, this paper also explores the state-level influence of retail sub-sectoral employments on U.S. GDP using a fixed panel regression model. The retail subsectors that displayed statistically significant positive correlation with GDP are motor vehicle dealerships, health and personal care stores, clothing stores, and nonstore retailers such as electronic shopping and mail order businesses. Among the control variables, state-level total patent counts had statistically significant positive correlation with GDP.

The Macroeconomic Impact of Europe’s Carbon Taxes

We estimate the macroeconomic impacts of carbon taxes on GDP and employment growth rates using 30 years of data on carbon taxation in various European countries. We find no evidence for a negative impact on employment or GDP growth but rather find a zero to modest positive impact. We also find a cumulative emissions reduction on the order of 4 to 6 percent for a $40/ton CO2 tax covering 30 percent of emissions. Reductions would likely be greater for a broad-based US carbon tax since European carbon taxes typically do not cover those sectors with the lowest marginal abatement costs. (JEL E23, E24, H23, Q54, Q58)

How does energy efficiency affect employment? Evidence from Chinese cities

Improving energy efficiency and securing employment are critical challenges for sustainable growth, especially in developing countries. Using an econometric model and panel data from China's prefecture-level cities from 2006 to 2019, this study provides empirical evidence of the impact of increased energy efficiency on employment. Multiple robustness test results reveal that a 1% rise in the energy intensity reduction rate leads to a 2% increase in the employment growth rate. According to heterogeneity tests, cities with low energy efficiency and depressed employment rates, compared to flourishing cities, may greatly benefit from increased energy efficiency. Furthermore, this study examines the influence mechanism of energy efficiency on employment. The outcome indicates that booming trade and technological progress magnify the positive impact of increased energy efficiency on employment. In addition, decreasing regional investment in the energy industry is one of the mechanisms by which improved energy efficiency promotes employment. Finally, this study proposes certain energy-saving policies at the city level to guide future policy refinement.

Challenging transitions? Assessing the occupational mobility patterns of US immigrants by gender

AbstractThis article uses the New Immigrant Survey to assess the occupational mobility of US immigrants. Estimates from OLS and Heckman selection models show the occupational mobility of immigrants follows a U‐shaped pattern: immigrants arriving in the United States see their occupational status decline before it gradually improves. However, even 9 years after coming to the United States, the occupational status of immigrants remains lower than prior to their arrival in the country. Our findings also suggest that immigrant women with higher occupational status tend to move more often to the United States than immigrant men. Conversely, immigrant women are more likely than men to experience career interruptions after migration. Finally, occupational employment growth rates (defined as the growth rate in the number of jobs for an occupation) have a positive impact on both men and women immigrants' ability to recover their occupational status, though the impact appears to be greater for immigrant women.

The Economic and Developmental Impacts of Tourism in Petra

Objectives: This study aims to apply the shift-share analysis method to evaluate the economic impact of tourism in Petra between 2007 and 2017, including employment changes across the study area.
 Methods: The shift-share model is designed to assess the growth of individual industries at the local level compared to the national level. This method demonstrates employment growth rates in the Petra region resulting from a favorable industry mix and additional job creation. The data used in this study were obtained from multiple governmental and private sources through structured and non-structured interviews. A questionnaire was developed to collect data on the personnel working at the businesses, the star ranking of the businesses, and the types of services provided in both 2007 and 2017.
 Results: The results indicate growth in most tourism-related industries, as well as public administration and education possibly due to a population increase in the region.
 Conclusions: Based on the results, we can conclude that the decline in tourism between 2007 and 2017 led to a slowdown in growth in other sectors, despite the presence of modest growth in those sectors due to natural economic expansion.

The effects of debt liquidity risk on firms' growth rate

PurposeIn theory, the impact of debt liquidity risk (DLR) on the firm's future growth is ambiguous. This study aims to examine the empirical relationship between the DLR and firms' growth rate using annual data for USA companies from 1976 to 2020.Design/methodology/approachGiven the longitudinal nature of the data, the author uses OLS (ordinary least squares) regression methodology with fixed effects to control for unobserved characteristics that might affect the dependent variable. Instrument variable regression is also used to address the potential endogeneity problem.FindingsThe results show that firms having higher DLR, as proxied by more short-term debt, experience lower growth rate. An increase in firms' short-term debt decreases the firms' future growth rate as evidenced by lower assets, revenue and employee growth rate. Moreover, the authors' results show that small firms or firms with more investment opportunities grow fast if the firms take higher DLR. Finally, cyclical firms with higher DLR exhibit lower growth rate during the credit tighten period. The authors' results hold for both the pre-zero lower bound (ZLB) era and ZLB period.Originality/valueTo the authors' best knowledge, this is one of the earliest studies to carefully examine the effects of DLR on firms' growth rate. While prior research finds that firms with higher growth potential, measured by market-to-book (MTB) ratio, use more short-term debt, the authors' research directly addresses whether DLR affects firms' future growth rate. The authors’ findings also help explain why firms with high growth potential use more short-term debt.

Triggering economic growth to ensure financial stability: case study of Northern Cyprus

This study questions the importance of public debt in stable growth between 1980 and 2018, specifically, the Ricardian equivalence hypothesis and Keynesian view are questioned. This study used data obtained from the Northern Cyprus State Planning Office. A restricted vector autoregressive model is used to test the causal relationships between this model and public debt, government expenditure, total capital, consumption, investment, employment, net exports, exchange rate, and gross domestic product growth rate. To ensure financial stability, the variables that trigger economic growth through increased interactions were evaluated. Accordingly, unlike other studies, the Wald test results reveal that public debt does not have a direct effect on the gross national product but indirectly affects total capital, consumption, investment, and public expenditure, all of which influence real gross domestic product (RGDP). It has been observed that employment affects RGDP, consumption, government spending, and investment. There is also bidirectional causality between consumption, government spending, and RGDP. The estimates of the Ricardian equivalent hypothesis are important. However, today's changing economic policies, declining real incomes, and consumer behavior in the face of ever-increasing inflation require that the theory be redesigned. Therefore, contrary to theoretical predictions, consumers are concerned about maintaining their standard of living rather than directing tax deductions to savings. Contrary to the claims of Keynesian researchers, no causal relationship is observed between public debt and growth in this study. However, public debt directly affects total capital, consumption, government spending, and investment, which are important for sustainable economic policy.

Analysis of the Effectiveness of Policy Guarantee Support under the COVID-19 Pandemic Economic Crisis

The purpose of this study is to suggest some policy implications by analyzing the support effectiveness of policy guarantees supported through the supplementary budget. During the COVID-19 period, the sales growth rate of the policy guarantee beneficiary companies was about 4.98% and the employment growth rate was about 0.46%, indicating a significant difference in growth potential compared to the non-beneficiary companies. First, among the economic crises caused by COVID-19, the crisis response through policy guarantees was relatively appropriate. Second, it is necessary to maintain an ‘appropriate’ level of support for ‘necessary’ economic sectors according to the government’s policy direction. Third, policy guarantee support can be effectively used as one of crisis response policies based on the effectiveness of the policy. Fourth, it is necessary to prepare for preemptive policy guarantee support by operating the crisis prediction system. Fifth, it is necessary to identify and prepare for possible crises after COVID-19 at the present time.

Number of creditors and the real effects of credit supply disruptions

This paper examines the role of bank-firm relationships in transmitting credit supply shocks to the real side of the economy in an emerging market. Using a hand-collected dataset for Iranian public companies, we exploit firms' exposure to a bank involved in a massive Ponzi scheme in 2011. We document a nearly 8 percentage point drop in annual employment growth rate for firms connected to the troubled bank following the credit dry-up caused by the scandal. We show that the magnitude of the effect on employment and investment is amplified by bank-firm relationship at least as much as by the financial constraint status found in previous studies. The results highlight the role of bank-firm relationships and the importance of access to multiple creditors in alleviating the consequences of credit supply disruptions.

The regional economic impact of wildfires: Evidence from Southern Europe

We estimate the impact of wildfires on the growth rate of gross domestic product (GDP) and employment of regional economies in Southern Europe from 2011 to 2018. To this end we match Eurostat economic data with geospatial burned area perimeters based on satellite imagery for 233 Nomenclature of Territorial Units for Statistics (NUTS) 3 level regions in Portugal, Spain, Italy, and Greece. Our panel fixed effects instrumental variable estimation results suggest an average contemporary decrease in a region’s annual GDP growth rate of 0.11–0.18% conditional on having experienced at least one wildfire. For an average wildfire season this leads to a yearly production loss of 13–21 billion euros for Southern Europe. The impact on the employment growth rate is heterogeneous across economic activity types in that there is a decrease in the average annual employment growth rate for activities related to retail and tourism (e.g., transport, accommodation, food service activities) of 0.09–0.15%, offset by employment growth in insurance, real estate, administrative, and support service related activities of 0.13–0.22%.

코로나19가 고용에 미치는 연구: 산업⋅지역⋅기업규모 중심으로

This study looked at how COVID-19 has affected employment by industry, region, and firm size. Employment data of 28,142 companies for 6 years from 2016 to 2021 provided by NICE Information Service was used. First, it was found that employment decreased after COVID-19 compared to before COVID-19 in manufacturing, wholesale and retail, lodging and restaurant, transportation and warehousing (including air transport), information and communication, educational service, and associations. However, there was no difference in employment growth rates before and after COVID-19 in agriculture, forestry and fisheries, mining, electricity gas, water and sewage, construction, finance and insurance, real estate, professional science and business facilities, health and social services, and arts and sports. Second, employment decreased in Seoul, Gangwon, Chungbuk, Gyeonggi, Gyeongnam, and Daegu. In particular, negative (-) effects were found in Seoul (significance level 5%) and Gyeonggi (significance level 1%). This is because industry and population are concentrated in the metropolitan area (Seoul and Gyeonggi), so Corona 19 has had a worse impact on industries and confirmed cases than other regions, and therefore, it seems that companies have reduced employment. In the rest of the region, there was no difference in employment before and after COVID-19. Third, it was found that both large companies and small and medium-sized enterprises (SMEs) have reduced employment after COVID-19. Due to human and material restrictions between countries, conglomerates and small and medium-sized enterprises (SMEs) have been affected in many ways by supply and demand of raw materials and restrictions on parts. Therefore, it seems that both large enterprises and SMEs have reduced employment by affecting environmental uncertainty and crisis.

혁신인증 유형에 따른 중소기업의 고용효과 비교․분석

The performance of innovation should be analyzed through various approaches. For this purpose, not only the financial performance but also employment effectiveness were scrutinized. The employment effectiveness of SMEs according to the innovation certification type was compared and examined. The companies that were analyzed are SMEs that have maintained innovative certifications (venture certification, inno-biz certification and main-biz certification) in 2016- 2020, and employment effectiveness were used in the division of the sales-employment coefficient, which is a relative employment effect, and employment growth rate, which is an absolute employment effect. The analysis results are as follows. First, it was confirmed that venturecertified companies have an advantage in both relative and absolute employment effects. Second, in the case of inno-biz and main-biz certified companies, an approach from the perspective of coupling is needed so that financial performance can be linked to employment. In addition, differentiated employment and support policies are needed in the stabilization stage of businesses suitable for the life cycle of the SMEs. Third, as the innovation certification type shows a certain difference in the composition of each industry, a detailed support policy that meets the characteristics of each innovation certification is required.

Economic Growth and Adult Obesity Rates in Rural America

Obesity has become an increasingly severe problem in the United States. From 2008 to 2018, the adult obesity rate rose from 33.8% to 42.4%, with rates that are notably higher in rural areas when compared to their urban counterparts. Meanwhile, rural regions have experienced relatively slower employment growth and higher poverty rates during the recovery from the Great Recession. Social scientists are interested in determinants of – and potential solutions to – this rise in obesity rates. The existing literature has focused on the relationship between obesity and social/economic factors, such as the number of fast-food restaurants, limited physical activity, and unemployment rates. However, one unexplored question is whether the level of economic growth experienced by a rural area plays a role in the obesity problem. This paper assesses the impact of economic growth (measured by county-level GDP per capita) on obesity rates (measured by the county-level percentage of adults with BMI higher than 30) in rural America. Nationwide, data is collected on a host of demographic and economic characteristics for all non-metropolitan counties from 2012 to 2016, resulting in a county-level panel data set (n=1,948, t=5). Control variables include age, race and ethnicity, unemployment rates, rates of physical inactivity, food assistance program participation, and an index measuring healthy food availability. Two different econometric approaches were applied: (1) a fixed-effects panel regression model and (2) a difference-in-difference model using propensity score matching (PSM). The results of both econometric models suggest there is no relationship between economic growth and future obesity rates. This suggests that programs focused on rural economic growth may not affect other quality-of-life metrics. The conclusion discusses these competing interests and how regional scientists can play a role in future research in this area.

Technical Change, Technical Efficiency, and Their Impact on Input Demand in the Agricultural and Manufacturing Sectors of Pakistan

Technical change has been considered as one of the most important determinants of economic growth. In developed economies, a proportionately higher percentage of GDP growth is attributable to technological progress and technical efficiency. However, technical change in developing countries is in its early stages and increased use of factor inputs is still the dominant source of economic growth. An attempt has been made in this paper to analyse technological progress and technical efficiency and their contribution to economic growth along with other factors of production by using more efficient methods in the manufacturing and agriculture sectors of Pakistan. There are a few studies on technological growth and technical efficiency change in Pakistan but they suffer from certain limitations. Most of them use the terms of technical change and productivity synonymously. Further, all of them use Hicks’s formula of neutral technical change and assume that technical change is happening at a constant rate. We have attempted to measure technical change, technical efficiency, and productivity in the form of the Hicks neutral technical change as well as in the form of variable and continuous and discrete technical change. Besides, this paper also analyses the impact of technical change on input demand (i.e., its impact on labour and capital demand) and examines the issue of technical change being either labour-saving or capital-saving. We found that technical change was taking place at a continuous and variable rate. The major contributor to the growth of output and value-added in both sectors was capital, contributing over 50 percent. Labour share was about 20 percent in the agriculture sector and about 10 percent in the manufacturing sector. Technical change share was very significant in manufacturing but not so in agriculture. The manufacturing sector in Pakistan has grown at an annual rate of about 6 percent during 1970s and at 8.7 percent during 1980s, and its share in GDP has increased from 16.5 percent to about 19 percent, but it has failed to generate new employment opportunities for the labour force. The employment growth rate is only about 2 percent.

Monetary policy, financial development and firm investment in Pakistan: an empirical analysis

PurposeThis paper aims to empirically examine the presence of a balance sheet channel (BSC) of monetary transmission mechanism (MTM) using firm-level panel data of Pakistan. It also explores the role of financial sector development (FSD) and firm age (FAge) in formulating the effect of monetary policy (MP) on the investment decisions of firms.Design/methodology/approachThe authors applied the two-step system generalized method of moments (SYS-GMM) estimator proposed by Blundell and Bond (1998) to carry out the empirical analysis. The final sample of the study includes 450 nonfinancial firms listed at the Pakistan Stock Exchange (PXS) during the period 1988–2021. The empirical framework of the study is based on the new classical model of investment. Different measures of MP are used to obtain the robust empirical evidence. To take into account the different dimensions of FSD, the index developed by Svirydzenka (2016) is utilized. To examine the moderating role of FSD and FAge, the interacted model is estimated, which enables the authors to estimate the MP effects at different percentiles of the moderating variables.FindingsThe study’s findings confirm the existence of BSC by revealing that MP instruments have negative, significant effects on firms’ investment decisions. These findings suggest that during periods of tight MP, firms significantly cut their investment expenditures. The results of the interacted model show that both FSD and FAge play an important role in lessening the adverse effects of MP on firms’ investment policy. Specifically, the calculated total effects suggest that the negative effect of MP on investment is considerably weaker at the higher percentiles of FSD and FAge.Practical implicationsThe findings of the study have several important policy implications for different stakeholders. Specifically, the evidence suggests that the monetary authorities should keep in mind the adverse effects of MP while designing tight MP. The tight MP will have a negative effect on firm investment, which, in turn, will adversely affect firm growth and subsequently the growth rate and level of employment in the economy. Thus, during episodes of tight MP, the authorities should provide other facilities such as a friendly tax environment, better legal and regulatory framework, special credit arrangements, and provisions of loan guarantees. The findings of the moderating role suggest that the government may improve FSD to minify the adverse impacts of tight MP. Finally, the findings suggest that the government should design external financing-friendly policies to provide more opportunities to newly established firms to avoid tight MP’s effects.Social implicationsThe findings of the moderating role suggest that the government may improve FSD to minify the adverse impacts of tight MP. Finally, the findings suggest that the government should design external financing-friendly policies to provide more opportunities to newly established firms to avoid tight MP’s effects.Originality/valueThere are three significant contributions of the paper. Firstly, it provides empirical evidence on the existing of BSC of MTM using firm-level panel data spanning over 43 years for an emerging and small economy, namely Pakistan. Secondly, it examines the moderating role of FSD and FAge in formulating the effects of MP. Finally, it presents the total impact of MP at different percentiles of FSD and FAge, which definitely broadens the understanding of MTM through indirect channels.

소셜미디어를 통한 직원의 기업전망 평가와 고용증가와의 상관성

The recent expansion of the use of social media has served as an opportunity to express users' opinions in real time in various fields such as society, economy, politics, and culture, and brought many platforms that provide various information about companies. Among them, Glassdoor.com which started 2008 in US provides users with evaluations of the current and the former employees of their companies and also provides a outlooks for the company's growth Such a platform has the utility of providing necessary information to whom want to find a job or change jobs. In addition to this, variable studies have shown that the company information provided through these platforms is useful for investors as well. In this study, it was tested whether the corporate growth prospects of employees provided by Jobplanet, a platform with a typical function similar to Glassdoor.com in Korea, have predictive power to predict actual corporate growth. The forecast provided by Jobplanet and the company's financial indicator data received from FnGuide were collected and composed of panel data and analyzed using fixed effect model regression analysis. As a result, it was found that companies with positive prospects had higher employment growth than companies with negative prospects. When the outlook was neutral, the employment growth rate was higher than that of companies with a negative outlook.

Credit Supply Shocks: Financing Real Growth or Takeovers?

Abstract How do firms invest when financial constraints are relaxed? We document that firms affected by a large positive credit supply shock predominantly increase borrowing for transaction-based purposes. These treated firms have larger asset and employment growth rates; however, growth entirely stems from the increased takeover activity. Announcement returns indicate a low quality of the credit-supply-induced takeover activity. These results offer the possibility that credit-driven growth can simply reflect redistribution, rather than net gains in assets or employment. (JEL G21, G23, G31, G32) Received June 29, 2021; editorial decision August 18, 2022 by Editor Andrew Ellul. Authors have furnished an Internet Appendix, which is available on the Oxford University Press Web site next to the link to the final published paper online.