Job Creation and Employment

Klára Major – Tamás Tétényi (2013): Job creation and employment. [Munkahelyteremtés és foglalkoztatás]

Economic Review. [Közgazdasági Szemle LX. évf., 2013. szeptember (965—991. o.).]

Economic development programmes generally define job creation as the solution for increased employment, however, it is only one of the transmission mechanisms of economic policy. By applying a spatial econometrics model for the Hungarian labour market (which is based on some key figures of the previous twenty years of the Hungarian labour market and a macroeconomic prognosis), the study examines the relationship between the spatial differences in the demand for labour and the actual employment, as well, as the potential employment effects of job creation. The model is estimated on a microregional panel data set. The results show the significant but moderate effects of job creation. Both employability of labour and the macroeconomic conjuncture are channels of greater importance. It is also proven by the analyses that only a small part (less than ten percent) of jobs created by job creation programmes increases employment on the long run, moreover, the majority of them does not necessarily improve the rates locally but in those neighbouring microregions where labour force surplus is larger. With the exception of bigger cities and especially the capital, labour markets indicate the scarcity of employable labour force which is strengthened by the increasing volume of subsidies. In the middle of the decade, prospects of national job creation programmes are rather unpromising, therefore the achievement of employment related goals of development policy requires the use of other channels.