Virginia Unemployment Essay Research Paper The economic — страница 3

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date, so it will be free of influence of difference in population. Per capita GDP and GSP are presented in Graph 2 Graph 2 Per Capita GDP and Virginia GSP 1975-1997 Per capita GDP and Per capita GSP increase over the time. In 1983 per capita Virginia?s GSP became higher that per capita GDP and it still is in 1997. Since 1983 Virginia Per Capita GSP is 4.54% on average higher than Per Capita GDP. Labor market Block Three concepts are presented in labor market block: regional unemployment rate, regional employment and population. Population Population of the region could play an important role in its development. Growth of population could stimulate economic activity, create new businesses and increase output or the region. Migration to a region can be an indicator of the region

being more desirable to people in terms of standards of living. Population of the region could change due to demographic factors like birth rate or death rate or economic factors like availability of job higher wages and higher standards of living. So population could depend on average regional wage, or in this case wage and salary rate (wage and salary per job) and unemployment rate. VaPop = 4395645.4 + 83.08 VaW&S ? 18830.1 VaUnplR (44.93) (39.73) (-1.35) R=0.99 F=5656.6 As it was mentioned before, population of the region depends on some demographic factors along with economic. So the purpose of this equation is to try to explain reason for population to migrate from one region to another. People tend to move to regions where they have better economic conditions. In this

case wage and salary rate has a positive affect on population, and unemployment rate – negative. People will choose to move to a place with higher wages (or because of higher wages), and bigger variety of available jobs (low unemployment). To compare population growth of Virginia and US Graph 3 shows Population Growth rate for US and Virginia Graph 3 US and Virginia Population Growth Rate 1975-1997 According to Graph 3 Virginia Population Growth rate mostly exceeds that of the US through the period from 1975 to 1997. And it is significantly higher during period of time 1984-1991 and is slightly higher in 1997 Employment Employment is an important economic indicator. It shows the number of people that are engaged in production of regional output, people that are receiving income

and paying taxes to the government. The Employment equation is in a form of labor demand relationship, where labor demanded is a function of regional output. Employment is population of a region that encouraged in production or creation of regional output. This means that the number of jobs available (employment) depends on the region output. Growth State Product is taken as an estimate for total output of Virginia. So GSP determines demand for number of jobs (employment). Employment of the region also depends on the wage rate of the region and how it stands comparing with national rate. The high wage and salary will attract people (both from inside and outside the region) to take a job. If we take employment as an estimate of labor force than it should depend on population of

the region, because labor force is a population of a certain age. Vaempl = 1980348.6+5.59 VaGSP + 35.01 VaW&S (25.01) (1.98) (1.43) R=0.98, F=83612.36 When including population in this regression it showed a positive relationship but was not significant. Two other variables are significant at 85% level of significance, are positively related to employment. Increase of output stimulates an increase of demand for labor (increase in employment) and increase in wages and salaries stimulates more people to take a job. Graph 4 shows the growth rates of Regional employment and National employment Graph 4 US and Virginia Employment Growth Rate 1975-1997 Employment in Virginia is growing at a higher rate than in the US for the time period form 1982 to 1988. Over 20-year period of time

regional and national employment growth rates are cointegrated. It is also useful to know what is the ratio of employment to a total population of the region. This data is plotted in a Graph 5 Graph 5 US and Virginia Employment ? Population Ratio 1975-1997 The employment to population ratio is higher for Virginia. It means that higher percentage of population is employed in Virginia than in US on average. Unemployment rate Unemployment rate of the region is an indicator of the labor market performance. An increase of unemployment rate causes a decrease of employment and regional output. The regional unemployment rate depends on national unemployment rate. The correlation coefficient between national and regional unemployment rate is 0.98. Regional economy experiences the same