Econometric model for the labour market in Romania.

• Author: Pintilescu, Carmen

1. INTRODUCTION

   The modelling of the regional development has been a major topic in the specialty works after the Second War. The need to take into consideration the specificity of each region has led to the creation of diverse and complex regional models.

   The main types of regional models are the input-output models (Leontief, 1951, 1986, Friedman, 1955), the econometric models (Isard, 1960; Bolton, 1985; Aydalot, 1985) and the general equilibrium models (Partridge and Rickman, 2007).

   In Romania, the regional modelling is still at an early stage. The need to include the specific regional characteristics in a model as well as the need to increase the data homogeneity imposes the creation of a model of regional development. Of the eight regions of the country, the North-East region is different from the rest of the others through specific features: it is a region with a reduced level of the GDP, of households' incomes and expenses, but with a very important occupational potential. The modelling of such a complex region is a necessity, aiming to substantiate possible scenarios of economic evolution of the composing counties and, especially, to study the possibility of using this model in similar situations to those of the North-East region.

   In the present paper, we shall present an econometric model for the labour market for the North-East region of Romania. The model is made up of a system of econometric and accounting equations which describe the economic structure of this region. In the first part of the paper we shall present the economic and social indicators included in the system of behavioural equations as well as the transformations performed on the series of statistical data. In the second part, we shall highlight the economic and social characteristics specific to this region. These characteristics will lie at the basis of the creation of the model structure for this region, namely the definition of behavioural equations that should describe the functional features of the North-East region. The structure of this model is presented in the third part of the paper.

   After the analysis of the stationarity of variables and the structural breaks of data series, we shall estimate the coefficients of the behavioural equations using estimation econometric techniques. The estimations of the coefficients of regression equations are showed in the last part of the paper.

2. METHODOLOGICAL ASPECTS

   The series of statistical data are formed of the yearly indicators registered at the level of the North-East region of Romania regarding the labour market (the activity rate of the working population (15-64 years) (%), the unemployment rate (%), the total occupied population (persons), the labour productivity, the regional GDP (billions of lei/year), the total gross value added (billions of lei/year), the GDP by main fields of activity (agriculture, industry, constructions, services) (billions of lei/year).

   The data were registered for the period 1995-2008. The statistical analysis was conducted for the variation indices while the deflation of statistical indicators expressed in current prices was performed as follows: the GDP value from each year was deflated using the national GDP deflator; the other indicators were deflated using the consumer price index.

   The main sources for the statistical data are: the directories of the National Institute for Statistics and the data provided by the National Commission for Forecasting.

   The check-up of the series stationarity was performed using the statistical...