Research on the Correlation between Economic Growth, Unemployment and Employment. A case study-Romania

The paper objective was to analyze the economic growth in close relationship with unemployment and employment in order to identify the main trends and correlation existing among these macroeconomics indicators in Romania during the period 2003-2014. In the analyzed period, GDP increased 2.83 times reaching Euro Billion 52.9 in 2014, while unemployment declined by 10 % and employment by 9.74 %. The economy was affected by the economic crisis in 2009, but since 2010 GDP registered a recovery based on a "jobless growth". The correlation coefficient and the linear regression functions confirmed the negative link between GDP and Unemployment and a weak positive relation GDP x Employment. R-2 pointed out that GDP is responsible of 32 %, and respectively, 56 % of employment and unemployment variation. An inelastic link between employment, unemployment and GDP was reflected by the small negative and positive elasticity coefficients. As a conclusion, Romania's economic growth is based on a consumption model which does not create jobs, 1 % GDP increase resulting in 0.87 % employment decline. A revised realistic strategy is needed to be set up by policy makers in order to harmonize economic and human development in Romania.