Revista Tinerilor Economiºti (The Young Economists Journal)

Economic Theories – International Economic Relations
The explanation for the reduction in the level of employed population must be
looked for in many directions. As part of human resources, the employed population
does nothing else than to follow the trend of the total population and working age
population. However, demographic factors cannot explain, entirely, the decline of the
employed population. Knowing the fact that the employed population represents the
statistical indicator that expresses the labour demand, it means that the level, dynamics,
structure and quality of the employed population in Romania reflect the relationships
that are formed between a series of economic variables, such as: rhythm of economic
growth and development, work productivity, the cost of labour force, demand of goods
and services (domestic and external demand), level of investments, etc.
In this study we intend to show if in Romania, between 1990 and 2009, the
changes that took place in the level and dynamics of employment were significantly
influenced by the domestic demand and external demand, and if the hypothesis
according to which the domestic demand and external demand positively influence
employment is confirmed.
3.1 The influence of final consumption on employment
The knowledge of consumption behaviour of population and public administrations
is an important source of information in order to understand the short term fluctuations and
long term tendencies occurring within an economy, including in the foreign financial
relationships reflected in the balance of payments. In the economic theory [5] it is stated that
consumption, by means of changes occurring in its evolution and structure, influences the
size and dynamics of aggregate demand, that in its turn drives the level and development of
production and finally, the labour employment level in that country.
In Romania, between 1990 and 2009, based on some changes in the economic
policy (fiscal, monetary, currency etc) it can be noticed that final consumption, the most
important component of aggregate demand in the Romanian economy, recorded a
fluctuant evolution with a growth trend, from 679.5 billion lei to 883.9 billion lei
(expressed in comparable prices 1990, according to annexe no. 1). The importance of
consumption in aggregate demand, can also be highlighted by the high share that
consumption has in real GDP (for the 1990-2009 period, an annual average share of
consumption of 82.92% in the GDP was calculated, based on the data in annexe no.1),
there being a close relationship between the two variables, because GDP represents the
total output of the national economy, the total income respectively, and income is the
most important factor that influences consumption.
Source: Own calculations based on the data in Annexe no. 1
Figure no. 2 Annual evolution of civil employment, consumption and investments, 1990-2009
Data in figure no .2 regarding the annual evolution of final consumption and
the evolution of the civil employed population show that in Romania the annual
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