Page 46 - Azerbaijan State University of Economics

THE JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE, V.78, # 1, 2021, pp. 40-65

Unemployment and poverty are closely linked. Economic growth does not always
mean increased employment. Economic growth, employment and poverty reduction
occur when effective employment is provided, which means: for the employee - a
guarantee of an acceptable level of remuneration in the long term; for the employer -
a growing dynamics of labor productivity and production efficiency. The high level
of competition between employers pushes the latter to increase production
efficiency, attract high-performance, and therefore more expensive labor. All this
ensures a high quality of business activity.

Some researchers have used the Kaleckian Macro-models to empirically investigate the
relationship between effective demand, income distribution, and unemployment, and
have tested this relationship using a structural vector auto regression (VAR) model
[Stockhammer E., Onaran O., 2004.]. The hypotheses studied focus on the definition of
unemployment. The VAR model includes capital accumulation, capacity utilization,
profit share, unemployment, and productivity growth and is calculated for the US, UK,
and France. The study found that employment is determined by demand and that
income distribution has little effect on either demand or employment. Technological
progress affects income distribution, as well as employment.

Considering the issues related to the consequences for the labor market of the entire
package of reforms carried out in Poland, it proves that this is due to the strong
dynamics of domestic consumption as a result of an increase in the level of
disposable income associated with higher employment, wages, as well as changes in
the system of taxes and benefits. While wage dynamics slowed at the end of the
period, wage growth continued in real terms. After 2008, the employment rate
among people aged 25-34 declined, but among other groups it either remained stable
or continued to grow. In particular, the employment rate of men and women aged
45-54 and 55-59 has increased since 2008 [Michal, M., Adrian, D., Leszek, M.,
Aneta, S., 2015]. The assessment of the impact of the increase in the minimum wage
in Estonia in 2013-2016 on the probability of continuing employment of employees
with different wage levels shows that employees will remain employed after the
increase in the minimum wage in 2013-2016, with the probability that employees
with comparable wages will remain employed in 2009-2011, when the minimum
wage has not changed. And estimates from the Estonian Labour Force Survey show
that the increase in the minimum wage in 2013-2016 did not have either a negligible
or inaccurately estimated impact on job retention for directly affected workers and
similarly for those affected indirectly. Since these results are resistant to the
selection of control variables, to the refinement of the treatment group, and to
changes in the time sample [Simone, F., Birgit, H., Karsten, S., 2018].

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