This research analyzes the evolution of employment and its relationship with economic growth in Ecuador from 2018 to 2022, examining pre-pandemic, pandemic, and post-pandemic periods. Using data from the Central Bank of Ecuador and the National Institute of Statistics and Census, we investigated the causal relationship between employment and economic growth through vector autoregression models and Granger causality tests. Results demonstrate the pandemic’s significant impact on employment indicators, with adequate employment showing the most dramatic effects and remaining below pre-pandemic levels during recovery. The research confirms the inverse relationship between growth and unemployment established by Okun’s Law (−0.302), while identifying a causal relationship from economic growth to adequate employment. Interestingly, during the immediate pandemic shock, growth showed a positive short-term relationship with unemployment, contrary to typical economic patterns. Analysis of other employment categories revealed no causality between growth and underemployment or between growth and other non-full employment, though impulse response analysis indicates growth generates impacts over time. This study contributes to understanding employment-growth dynamics during economic shocks and has implications for policy development to strengthen labor markets in times of crisis.

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Vector Autoregression Analysis of Employment-Growth Dynamics in Ecuador (2018–2022): Pre-pandemic, Pandemic, and Post-pandemic

  • Nataly-Alexandra Ñacata-Loachamin,
  • Lili-Carolina Salcedo-Vallejo,
  • Carmen Beltrán-Mesías

摘要

This research analyzes the evolution of employment and its relationship with economic growth in Ecuador from 2018 to 2022, examining pre-pandemic, pandemic, and post-pandemic periods. Using data from the Central Bank of Ecuador and the National Institute of Statistics and Census, we investigated the causal relationship between employment and economic growth through vector autoregression models and Granger causality tests. Results demonstrate the pandemic’s significant impact on employment indicators, with adequate employment showing the most dramatic effects and remaining below pre-pandemic levels during recovery. The research confirms the inverse relationship between growth and unemployment established by Okun’s Law (−0.302), while identifying a causal relationship from economic growth to adequate employment. Interestingly, during the immediate pandemic shock, growth showed a positive short-term relationship with unemployment, contrary to typical economic patterns. Analysis of other employment categories revealed no causality between growth and underemployment or between growth and other non-full employment, though impulse response analysis indicates growth generates impacts over time. This study contributes to understanding employment-growth dynamics during economic shocks and has implications for policy development to strengthen labor markets in times of crisis.