Evaluating the Link Between Agricultural GDP Growth and Employment in Albania - Economicus

by Dr. Irisi BELERAJ

Abstract
Purpose: The aim of this article is to analyze the impact of economic growth on employment in the agricultural sector. However, it raises a critical question: Is it legitimate to assume that economic growth in agriculture will lead to a corresponding increase in employment in this sector? Historically, the agricultural sector in Albania—despite being regarded as one of the country’s key competitive advantages relative to other countries in the region—continues to face persistent challenges. Consequently, development strategies for this sector have focused primarily on enhancing productivity, with the expectation that such improvements will generate positive effects on employment within agriculture.
Methodology: To explore this relationship, the study utilizes annual time series data on GDP and employment in agriculture covering the period from 2000 to 2024. These data are analyzed using regression techniques implemented in the e-views software, through which a “translation” coefficient is estimated. This coefficient serves as a key indicator of the relationship between sectoral economic growth and employment dynamics in agriculture.
Findings: Building on the estimated model, a forecast is conducted for the period 2025–2030. Referring to Okun’s Law, the results suggest that economic growth in the agricultural sector may, counterintuitively, be accompanied by a decline in employment within the same sector. Value: These findings offer important insights for policymakers, helping them to better anticipate and address structural issues that may emerge as productivity increases in the agricultural sector.
Keywords: Agricultural sector, Gross Domestic Product, Employment, Okun’s Law.

https://doi.org/10.58944/bnva9349