The impact of some economic and financial variables on the employment change during Covid-19 in China

ABSTRACT

This chapter examines the impact of some economic and financial variables on the employment change covering the period of Covid-19 in China. We apply the annual data of China during the period of 1989-2019 by building a long-term model and find that industrial upgrading and economically active population cause economic development, along with the increase of unemployment population. The results show a reverse change in variables of GDP and registered unemployed persons in urban areas. We then apply the quarterly data of 2019-2020 by constructing a short-term model and find that GDP and unemployment conditions still show a reverse change. Because of the lag effect, the increase in national financial expenditure is not associated with a slowdown in the employment market;a rise in GDP or business prosperity is consistent with a fall in unemployment. The Vector Autoregression Model thus provides an empirical prediction of recovery in labour markets of China. © 2022 World Scientific Publishing Company.