Academic journal article Economics & Sociology

Labour Force Availability as an Economic Development Factor in Post Socialist Countries

Academic journal article Economics & Sociology

Labour Force Availability as an Economic Development Factor in Post Socialist Countries

Article excerpt

(ProQuest: ... denotes non-US-ASCII text omitted.)

Introduction

Unprecedented growth of physical capital reproduction system's capacity and flexibility caused quality changes in the developed countries' productive factors hierarchy (see, for example Stewart, 2007; Edvinsson and Malone, 1997). In particular, skilled labour took the position of factor, which limits production output, long-term growth rate and and acts as a scarce in relation to the other resources. Neoclassical economics suggests that intensification of implementation of scientific-and-technological advance achievements in economic activity promotes the growth of skilled labour relative rareness, even with the continual advancement of the labour force's educational level. Thus, recognition of the human development as a decisive factor for specification the growth ratio of society's welfare, became a theoretical base for economy policies in developed countries. However, priority of creation of prime conditions for human potential development contradicts with short-term financial stabilization problems. Aggravation of social contradictions, long periods of recession, inherent to developed as well as emerging economies, signifies the result of domination of priorities for short-term financial stabilization above requirements for social development during state economy policy formation process (see for example, Krugman, 2013; Anand and Segal, 2008).

Therefore, studies of the mechanisms which mediates the effect of additional investment in human capital on growth in the short and long term remain relevant even for developed countries.

Definition of personal factor's role in production in developing and post socialism countries is more problematic. In domestic science contradictory between tasks of financial stabilization and accumulation of human capital is practically not considered. Typically, economic growth is associated with an increase of spending on education and health, but problem of resource allocation between the public and market financing, or problem of combining (interchangeability) institutional reforms and additional funding are not considered (see, for example Grishnova, 2001 or Amosha and others, 2006). Therefore, the theoretical framework of economic policy in the post-socialist countries even more urgent need to clarify how the economy's provision of labour resources affects the pace and trajectory of its development, what are the requirements from contemporary processes of globalization to funding of human development.

Consequently, the subject of the research is mechanisms of labour resource availability impact on long term economic growth pace in the modern global economic environment in countries with post-socialist transforming economy.

The aim of the research is theoretical justification and empirical testing of the thesis that post transformational stage of economic system development fundamentally changes labour resource availability impact on its economic growth, and increase of skilled labour availability is less significant factor of economic growth than institutional and structural reforms for post-socialist countries with weak institutions.

In order to achieve this goal within this article, it is attempted to work out the following issues.

Firstly, interpretation of the "labour force availability" concept is to be adapted to the conditions of modern stage of global economies development (it is to be specified with the impact of informatization and intellectualization of production as well as globalization of economic activity).

Secondly, on the basis of such adaptation, we will establish a time series of indicators that will characterize the dynamics of labor resources availability in selected countries.

Thirdly, we compare the dynamics of the labor endowments indicators with economic growth rates in selected countries.

Fourthly, neoclassical tool of explanation of the connection between labour force availability and economic growth rate is to be supplemented taking into account institutional barriers which block the countries with immature institutions from overcoming the skilled labour shortage. …

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