Does Growth Create Jobs? Evidence for Advanced and Developing Economies

Global job creation remains sluggish, prompting calls for policy actions to raise economic growth. Will growth create jobs? Recent IMF research documents a striking variation among countries in the extent to which employment responds to GDP growth over the course of a year. In some countries, labor markets are quite responsive: when growth picks up, employment goes up and unemployment falls; in other countries the response is quite muted. Thus, a pick-up in growth— through aggregate demand stimulus for instance—will result in more jobs, but the extent of job creation in the short run could vary sharply across countries. Some structural measures can thus serve as useful complementary policies, as also discussed in IMF research.

Continue reading IMF Research Bulletin.

Posted by at 9:14 PM

Labels: Unemployment

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