MACROECONOMIC ANALYSIS OF LABOUR MARKET PERFORMANCE: THE CASE OF THE SLOVAK REPUBLIC
MACROECONOMIC ANALYSIS OF LABOUR MARKET PERFORMANCE: THE CASE OF THE SLOVAK REPUBLIC

Summary/Abstract: The paper deals with development of economic and labour market performance in the Slovak Republic. Consequences of the economic crisis on the labour market, respectively on unemployment are also discussed in the paper. During the crisis, real gross domestic product decreased in the Slovak Republic. Massive drop of gross domestic product led to increase in the unemployment rate. We also compared Slovak economy with another EU New Member States. The main question is if this process was also seen at regional level. The unemployment rate differed significantly among the Slovak NUTS 3 regions during the period between 2005 and 2012. According to previous studies high unemployment is caused by drop in economic performance or by some structural problems in the region. During economic growth the unemployment rate was decreasing and during economic downturn it was increasing. We used monthly seasonally adjusted data during the observed period between the years 2005 and 2012. In total, we had 96 observations. We also applied the Hodrick-Prescott filter for estimating the natural rate of unemployment. This method is often used for estimating the potential output and is possible to use in the case of unemployment. Our empirical results show that in most regions the real unemployment rate was lower than the natural rate of unemployment during the pre-crisis period. In other words, it means that the Slovak labour market was in positive unemployment gap. However, this gap was not the same in all regions.

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