Assessment of the reaction of cyclical unemployment to the economic decline and recovery growth in Russia

The purpose of the research is to conduct the econometric modeling of the interconnection between changes of the output and unemployment levels in Russia by disaggregating the periods of the decline and economic growth. Research methods are based on a modified Okun’s model which reflects the impact of changes in the output volumes on the dynamics of the unemployment level. The sample includes 79 Russian regions and uses annual (2000-2019) and quarterly (2010-2019) data. The results obtained showed that the Okun’s coefficient is negative in each studied specification, which corresponds to the theoretical content of the interaction between macro-economic parameters. Middle-term (2010- 2019) values of the Okun’s coefficient (-0.105) are acquired on the basis of the Generalized Linear Model assessments, which is free from perturbations associated with quarterly parameter fluctuations. The Okun’s coefficient value, calculated according to quarterly data, is around -0.05. We statistically analyzed the “asymmetry effects” on the labor market during the economic decline and recovery growth on the basis of annual data (2000-2019). Assessments of the econometric models showed that the Okun’s coefficient displays stronger reaction of the unemployment to the decline (-0.167) in comparison with the recovery growth (-0.090). The novelty of the research results is related to the construction of the econometric models reflecting the impact of changes in the output models on the dynamics of the unemployment level in Russia in 2000-2019 and disaggregated periods of the economic decline and recovery growth. The following development of this research will be related to the assessment of the impact of the economic recession on the unemployment level in Russian regions. The results may be used for conducting anti-crisis policy in the labor market during the economic recession.