Correlation between Total Unemployment and Expenses with Unemployed Social Protection in Romania
Correlation between Total Unemployment and Expenses with Unemployed Social Protection in Romania

Summary/Abstract: The goal of the study is to estimate the correlation between two important macroeconomic variables in the labour market: the total unemployment rate over the active population (as dependent variable), respectively the rate of social protection expenditures with the unemployment over GDP (as independent or causal variable) in Romania. In order to achieve the goal, the following objectives were achieved: a) the formation of time series and the statistical analysis for the two variables; b) designing a mono-factorial linear econometric model; c) estimation of the econometric model. The empirical data used are quarterly data between January 1997 and December 2016. The data quality was provided by using the following sources: EUROSTAT, respectively the Romanian Statistical Yearbook. The main scientific results of the study are as follows: 1) statistically the time series of the two variables are stationary only at the level of the first order differences, the series of the independent variable is non normal,and the dependent variable is quasi-normal; 2) the estimation of the quantitative model shows that there is a direct correlation (though weak, about 3%) between the dependent and the independent variable. At the same time, there are no influences outside the independent variable (the free term of the first degree equation is approximately - 0.002). In conclusion, it can be said that the variation of the total unemployment rate in the active population is direct, albeit relatively weak, influenced by the change in the rate of social protection expenditures in GDP.

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