Effect of macroeconomic variables on unemployment rate in Poland
2010
Zawojska, A., Warsaw Univ. of Life Sciences (Poland). Dept. of Economics and Economic Policy
Even though the paper focuses on overall unemployment in Poland, it highlights the agriculture connections with the national economy and particularly with labour market that might govern individual choices between employment in the farm and non-farm sectors. The research aims firstly to complement the literature on unemployment in Poland, and secondly to examine the relationship between macroeconomic indicators and unemployment rate. The paper consists of two major parts. The first part presents an overview of the relevant literature concerning the above mentioned relations. The next part, based on the data available from the Central Statistical Office of Poland, National Bank of Poland and the Ministry Finance of Poland, offers the results of author’s empirical study. Correlation analysis and simple linear models were applied to explain the relationship of unemployment rate with individual macroeconomic indicators (explanatory variables). The results show that during the years included in this study (2002-2008) the unemployment rate in Poland was statistically significant and negatively impacted by the economic growth, Gross Domestic Product per capita, exports and imports, foreign direct investments, final consumption expenditures, gross capital formation, and central government expenditures. At the same time, the real interest rates of the central bank were positively related to the unemployment rate. Assuming that the evolution of real interest rates in Poland was mainly due to the monetary policy changes, it is possible to reach the conclusion that restrictive monetary policy has negatively affected unemployment rate; although with a time-lag effect. No statistically significant linear relationship between the current and past unemployment rates in Poland; thus suggesting a lack of hysteresis effect.
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