Shift-share analysis of employment growth – the case of V4 countries

Abstract

The performance of labour market together with its consequences (changes in employment, wages and labour productivity) is regarded as one of the major economic problems of our times. Well functioning labour market is an important precondition for economic growth and competitiveness of the country (Musil 2007; Blanchard 2006). The aim of this paper is to examine the changes in employment with the help of the shift-share analysis. Shift-share analysis enables the decomposition of employment growth into sectoral-mix effect, competitive effect and residual effect. First part of the paper will present the literature background on the development of labour markets of the V4 countries. Later on, we try to identify the driving forces of employment growth in the Visegrad group countries during the period 1994–2006. In addition, the last part of the paper will summarise the results obtained in our analysis.