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Key Determinants of Job Creation: A Comparative analysis between OECD Countries and Emerging Economies

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  • Samuel Ajayi-Obe

Abstract

This study explores the key macroeconomic determinants of job creation in Organisation for Economic Co-operation and Development (“OECD†) countries and Emerging economies. A panel dataset consisting of 56 countries between 1980 and 2014 was used to examine the impact of the explanatory variables on job creation. In light of the rapid increase in globalisation-induced factors over recent decades, contrary to popular belief, technology was evidenced to substitute labour in emerging economies but was insignificant for OECD countries. Productivity was significant and positive for just the OECD countries. However, the study is unable to provide sufficient evidence of Foreign Direct Investment (FDI) or inflation being significant determinants of job creation. The practical implications of the results are that it dismisses theories suggesting productivity results with job losses. The study also provides further evidence supporting several research by observing the detrimental effects of minimum wage policies on employment. Furthermore, economic growth remains a significant determinant of job creation.

Suggested Citation

  • Samuel Ajayi-Obe, 2020. "Key Determinants of Job Creation: A Comparative analysis between OECD Countries and Emerging Economies," Economic Alternatives, University of National and World Economy, Sofia, Bulgaria, issue 4, pages 619-647, December.
    • Handle: RePEc:nwe:eajour:y:2020:i:4:p:619-647
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    More about this item

    Keywords

    economic growth; technology; Labor Economics; Job Creation; Minimum Wage;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

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