engleski

Links between tourism, employment, unemployment, and productivity : case of Croatia

This paper employs unit root testing and Johansen cointegration to examine the relationship between tourism output, employment, productivity growth, and unemployment rate controlled by a recession/expansion in Western Europe as a dummy variable, in Croatia over the period 1952-2004. Prior testing for cointegration between the these variables, the ADF and the PP unit root test was applied to check the time series properties and to determine the order of integration of the data used in this study ; we are find that all included variables are I(1) or integrated of order I. The results of cointegration test suggested that there is no possibility of cointegration relation between the variables, when intercept and trend is included. We are proceed and opted to estimate of VAR (2) instead of VECM because we find enough evidence of stability of the system of difference equations. When the restricted tourism regression is extracted from VAR(2) we are obtained the autoregressive regression of order one, e.g. AR (1). One-time lagged output of tourism has a positive coefficient of about one unity ; if lagged tourism output grows by one per cent, current tourism will rise in elastic mode, hence proportionally by one. Whit this exercise we didn’t prove any influence of other included variable on tourism growth, but we find that tourism growth did remain significant variable in a excepted manner in employment and unemployment regression. In the first one the tourism growth will predict rise of aggregate employment and in the second regression the unemployment fall is linked with tourism growth. The Granger causality test was applied to investigate the direction of causation between main macroeconomic variables and tourism output in Croatia. The empirical results suggest that bi-directional causality from tourism growth to main macroeconomic variables and vice versa exist (beside unemployment). Croatia has experienced substantially large-scale development in the tourism sector, especially over the past few years. From this reason, it is examined that causality relationship between economic growth and tourism expansion in the Croatia economy and found that tourism expansion and economic growth (e.g. productivity and employment) cause each other. That is, there is a reciprocal relationship (the two way causality) between the two occurrences. By the impulse response functions we illustrate the qualitative response of the tourism variable in the system to shocks to productivity, employment & unemployment rate. We find that all reaction follow a direction which couldn’t one a priori assume. The IRF shows that labour productivity reaction against a tourism output unitary shock is positive ; by these IRF result we proved the hypothesis that aggregate labor productivity could be seen as an externalities of tourism growth. We can’t without doubt claim that a tourism growth shock induce a negative respond to unemployment rate and vice versa positively impact to aggregate employment via conjectured multiplier mechanism. But if linked those findings with the productivity evidence we conclude that increase of the productivity caused by disturbance of initial equilibrium due to tourism shock jointly involve less employment and relative insensibility in the sphere of unemployment part of the system. Or in the non-technical words saying, is the tourism growth maybe the channel of labor augmenting technology in other complementary sectors of economic activity, we don’t know yet and it should be answered in one of the future paper.

tourism; productivity; unemployment; recession in the Western Europe; Croatia

nije evidentirano