Research on the Relationship Between Economic Growth and Employment With Panel Data Model

Economic growth, full employment are the main objectives of macroeconomic policy. From practices of economic development in many countries, employment and economic growth generally has a positive relationship. However, China's economic growth and employment showed significant "high growth, low employment" situation since 1990s. How to achieve positive interaction between employment and economic growth is practical problems at present. Based. on the systematic literature review in the relationship between economic growth and employment, research on economic growth and employment growth with panel data model is few. In this paper fixed effects panel data model is used to analyze the relationship between economic growth and employment. The results show the elasticity of GDP to the employment is 17%. It shows the GDP growth is beneficial to the growth of employment. But the pulling effect of GDP growth on the employment growth becomes smaller when time goes on. It is suggested that China should put the employment the same level of strategic goal as high as and economic growth. It should be the basic starting point for policy formulation.