Leading indicators for labour market

Abstract

Forecasting changes on labour market is one of key problems of economic policy. Relatively few authors consider analyzing business cycle turning points occurring on labour market, though. It is even less common to classify labour market variables in terms of leading or lagging properties and construct leading indicator for labour market, so popular in the analyses of overall economic activity. The objective of the paper was to choose leading variables for the labour market out of labour market statistics and show their properties in comparison to chosen labour market coincident indicator. Common Polish labour market data from CSO, labour offices and own research were analyzed. Known leading indicators for other than Polish labour markets were also reviewed. The analyzes not only enabled to choose leading variables for the labour market, but also to empirically verified the reaction of Polish labour market on shocks causing business cycle fluctuations (determined the sequence of spreading of cyclical fluctuations throughout the labour market) and pointed the areas of labour market with fastest reaction on the cyclical fluctuations (showed the distribution of labour market adjustments in time). Classical and growth cycles were analyzed, from the point of view of step and deviation cycles filtered with use of chosen linear filters. Turning points analysis and cross-correlation analysis between leading and coincident indicator for labour market were also done. (original abstract)