The Nexus between Employment and Economic Growth: A Cross-Country Analysis
Round 1
Reviewer 1 Report
Objective and fit in the journal’s scope
This article addresses an interesting theme to the present context: jobless growth, examining the relationship between employment and economic growth in developed and developing countries over the period of 1970-2019. This objective is unquestionably pertinent and opportune, given the enormous changes and challenges faced by labor markets all over the World, provoked by rapid advancements in digital technologies and artificial intelligence (AI).
This work has been submitted to the Special Issue "Sustaining Work and Careers for Human Well-Being in the New Normal", in which it is stated that papers should apply “unorthodox methodologies or non-traditional views to investigate the topics related to work and career sustainability across borders in the new era.”
Although the topic under analysis is clearly fit into the Special Issue scope, the methodology applied is far from being unorthodox or non-traditional – the authors depart from a Cobb-Douglas function to explain employment elasticity to growth. Besides, the paper suffers from serious theoretical and empirical problems, which make me recommending its rejection. Further details are provided below.
Quality of English Language
The whole text is very difficult to read, due to significant failures in grammar and sentence structure.
In case it is accepted for a second round of revisions, it needs to be submitted to extensive language editing.
References used
The list of references must be updated, since above 50% of them are more than 20 years old. This doesn’t seem acceptable to a Special Issue dedicated to the New Normal era.
Model, Method of Analysis and Data
The authors depart from a Cobb-Douglas production function (equation (1) - logarithmic transformation of it) and manipulate it to equation (2), to be estimated through a “suitable econometrics method”.
First, parameters beta in equation (1) and equation (2) are necessarily different – they should not be named the same way. This is a formal error.
Substantial errors:
1) Equation (2) intends to represent the demand of labor. It is at least questionable to assume that GDP, the level of capital and number of worked hours are exogeneous variables.
2) Besides, any demand function should derive from an optimization condition. What is the optimization condition in this case?
3) The demand of any production factor (or final good / service) always depends of its cost – this is basics microeconomics. Thus, another serious fault of this model is the fact that no cost variable (wages, for example) is considered.
4) Additionally, human capital (for example, average qualification of employees) is not considered as well. Related to this aspect, productivity differences between countries are not accounted for.
5) The demand for employment is also highly influenced by sectoral composition of production. Since this study compares groups of countries with very distinct economic structures, this should also be included in the model.
Considering the serious theoretical errors of this model, its results are meaningless. As a consequence, one should not derive policy implications from them (as the ones included in the Conclusion).
Quality of English Language
The whole text is very difficult to read, due to significant failures in grammar and sentence structure.
In case it is accepted for a second round of revisions, it needs to be submitted to extensive language editing.
Author Response
The authors would like to thank the reviewer for his time and effort in helping us improve the quality of this paper. Thank you very much for your kind suggestions and much appreciated that the reviewer identified and pay our attention to these points:
Author Response File: 
Author Response.pdf
Reviewer 2 Report
There's not much to comment on. The study contemplates a real problem in a clear and objective way and can be useful for the implementation of job generation policies in developing countries.
The English language is well and clearly written. I suggest minor revision regarding some typos. Something that will refine the work, making it more elegant.
Author Response
The authors would like to thank the reviewer for his time and effort in helping us improve the quality of this paper. Thank you very much for your kind suggestions and much appreciated that the reviewer identified and pay our attention to these points:
Author Response File: Author Response.pdf
Reviewer 3 Report
Referee Report
The paper entitled “Nexus between Employment and Economic Growth: A Cross Countries Analysis” provides an analysis of the relationship between employment and economic growth in developed and developing countries. By using an econometric model to assess the employment elasticity with respect to GDP growth the authors found interesting results. The research article aims at being published in a well-reputed journal, Sustainability.
The topic of your paper is of current interest and it is obvious that you have put a lot of effort into it.
The article is well structured.
The approach presented in the paper seems to be an adequate one.
The general background is pretty well presented.
The methodology and the materials used are pretty well described in the article, as well as the results and conclusions, which are accurately and clearly presented.
Recommendations:
(1) The contributions and the novelty are not clearly presented. It is necessary for authors to further state their innovations in Introduction.
(2) The authors should add more recent literature relevant to this study.
(3) The methodology used in this study is very precise and valid. However, the authors should also explicitly highlight the shortcomings of the employed methodologies.
(4) The dataset is extensive, covering 44 countries divided into three groups (full sample, developed, and developing countries) and almost 50 years, which is very good.
(5) The authors should explain in more detail the reasoning behind the selection of the control variables average working hours, capital, and population. Why have these particular variables been selected above others?
(6) The thousand separators would greatly improve the readability of the article; please consider using them (e.g., rows 274-275 and in Table 2).
(7) In rows 405-407, the wording is not clear: “But average hours have negative and insignificant in the CCEMG estimator in the full sample and for the developed countries it is positive but insignificant in the AMG estimator.”
(8) The findings should be discussed in a more structured, organized and clear manner. For example, rows 415-416 “A 1 percentage point decrease in the average working hours will increase employment by 0.409 percentage points in the developing countries in AGM estimator while 0.65 percentage points in the CCEMG estimator.” comment on the results which take into account the trend, presented in Table 12, not on the results presented in the table that follows them immediately (Table 11) and slightly mislead the reader.
(9) The authors could also consider placing the results in context with current literature in a separate discussion section, where an extensive examination of the results should be considered.
Regards,
Comments for author File: Comments.pdf
Author Response
The authors would like to thank the reviewer for his time and effort in helping us improve the quality of this paper. Thank you very much for your kind suggestions and much appreciated that the reviewer identified and pay our attention to these points:
Author Response File: Author Response.pdf
Reviewer 4 Report
This paper serves as an empirical study on economic growth and employment, addressing a highly significant and important topic. While it is a valuable paper, some concerns regarding certain aspects arise during the review process.
Firstly, it is essential to clearly explain the relationship between the content of this paper and sustainability. It would be beneficial to add such explanation in the introduction, conclusion, and interpretation of the research results.
Secondly, there is a need for terminology clarification. Tables 11 and 12 have employment as the dependent variable. In that case, shouldn't the coefficient of lnY be referred to as the GDP elasticity of employment for accurate expression? The term "employment elasticity" seems to be incorrect.
Thirdly, the coefficient value of lnY is less than 1. In that case, wouldn't it be appropriate to interpret it as being inelastic in both advanced and developing country samples? GDP growth rate has its limits in promoting employment growth. Shouldn't we interpret it as being inelastic rather than elastic?
Fourthly, if that is the case, what are the policy implications of this paper?
Lastly, why was a fixed effects model or other panel data analysis methods not employed? It seems that this paper used the pooled OLS method. Additional explanation of the methodology is needed, and it would be helpful to provide indicators that indicate the explanatory power of the model.
Author Response
The authors would like to thank the reviewer for his time and effort in helping us improve the quality of this paper. Thank you very much for your kind suggestions and much appreciated that the reviewer identified and pay our attention to these points:
Author Response File: Author Response.pdf
Reviewer 5 Report
This is a well written paper, with some robust argumentation and interesting findings.
Nevertheless, I have the following major concerns:
1. Given the journal’s scope, the authors should place the whole discussion under the notion of sustainable development. Thus, a short discussion of the term should be provided in the introduction. In this vein, the following two papers should be included. (a) Manioudis, M. & Meramveliotakis, G. (2022) “Broad strokes towards a grand theory in the analysis of sustainable development: a return to the classical political economy”, New Political Economy, 27(5), pp. 866-878, and (b) Tomislav, K. (2018) “The concept of sustainable development: From its beginning to the contemporary issues”, Zagreb International Review of Economics & Business, 21(1), 67-94.
2. Authors should include more up to date references.
Minor editing of English language required
Author Response
The authors would like to thank the reviewer for his time and effort in helping us improve the quality of this paper. Thank you very much for your kind suggestions and much appreciated that the reviewer identified and pay our attention to these points:
Author Response File: Author Response.pdf
Round 2
Reviewer 4 Report
The revised manuscript has appropriately reflected the modifications suggested.
Author Response
We addressed all your comments with a letter and spirit. The authors would like to thank the reviewer for his time and effort in helping us improve the quality of this paper. Thank you very much for your kind suggestions and much appreciated that the reviewer identified and pay our attention to these points:
Reviewer 5 Report
I believe that the authors have sufficiently addressed my previous comments and that their additions have improved the paper.
Author Response
We addressed all your comments with a letter and spirit. The authors would like to thank the reviewer for his time and effort in helping us improve the quality of this paper. Thank you very much for your kind suggestions and much appreciated that the reviewer identified and pay our attention to these points:
