Labor force participation in Eastern European countries: nonlinear modeling

Abstract

Purpose The purpose of this paper is to investigate the behavior peculiarities of the labor force participation in Eastern European countries. Design/methodology/approach The authors provide the analysis of nonlinearity in dynamics of economic active population and perform the econometric analysis using logistic smooth transition autoregressive models that are flexible and capture various kinds of behavior for different modes. The paper investigates labor markets of six Eastern European countries, Hungary, Bulgaria, Poland, Slovakia, Romania and Croatia that are characterized by lower level of labor force participation rate (LFPR) than average level in EU. Findings The results of modeling quantitatively characterize smooth changes in the behavior modes of labor force activity for each country and indicate how population economic activity depends on previous labor market states. The estimated slope parameters that determine the smoothness of transition between regimes show that, in all countries, the labor force participation quite quickly reacts to changes that occurred on the labor market in the past. During recession periods, households of European countries that joint EU last decade in order to prevent the depletion of their total income increased labor supply and showed increased activity in job search. Originality/value This paper indicates the nonlinearity and asymmetry in LFPR in transition economies, discovers variety of its dynamics in the different regimes and determines the indicators that cause the change of the population economic activity behavior in each country.

The Mediation Role of the Human Development Index in Economic Growth and Labor Force Participation in Unemployment: Evidence From East Java Province Data

“…it can be explained that there is a negative and significant influence between the labor force participation rate on unemployment. In this case, it is in line with research conducted by (Parveen, 2022) , (Kumari, 2018) , (Nemore et al, 2021) , (Saner, 2019) , and (Oliskevych, 2019) . However, this is contrary to research by (Kumar & Kumar, 2020) which states that the Labor Force Participation Rate on Unemployment has a positive effect.…”

“…In research conducted by (Kumar & Kumar, 2020) states that with an increase in the skill development level of the unemployed, the number of unemployed people will decrease and the number of people employed will increase. However, this has been refuted by research (Parveen, 2022) , (Kumari, 2018) , (Nemore et al, 2021) , (Saner, 2019) , and (Oliskevych, 2019) which state that the labor force participation rate has an effect on unemployment.…”

Does the Effectiveness of Budget Deficit Vary between Welfare and Non-Welfare Countries?

“…At the same time, the coefficients are insignificant in other quantiles. These indicate that the LF barely facilitates economic growth for welfare countries, which is in line with some previous findings by Oliskevych and Lukianenko [69] and Soava et al [70]. As for FCF, its coefficients are negative under all quantiles except the first quantile, meaning that domestic investment barely promotes economic growth for welfare countries.…”

“…A number of studies, including a study by Chu et al [68], agree that strong governance removes barriers from the growth function and promotes economic growth. The result of this study also reveals that strict regulations and governance norms frequently enhance growth for non-welfare countries in quantiles and occasionally inhibit growth for welfare countries; these findings are also parallel with Chu et al [68] and Oliskevych et al [69]. Finally, our research displays that the QOG plays a critical role in the relationship between economic growth and the budget deficit, and the study also indicates that the QOG promotes growth sustainability in both welfare and non-welfare countries.…”

Peculiarities of Bifurcation in Price Dynamics

“…A. Tănasie, R. Drăcea and G. Lădaru (2017) represented the new examples of applying of chaos theory and showed the importance of irregular attractors for different systems that are generated by bifurcation cascades during realization of some scenario in economic policy [3]. Scientists implied the modern nonlinear econometric tools to describe the dynamic proper-ties of macroeconomic factors and emphasized the asymmetric responses of employment possibilities and other indicators of labor market to smooth the impact of positive and negative economic shocks [4,5]. G. Sorger (2018) built the neoclassical economic growth model under monotonic and convex technology and found the chaotic solution [6].…”