Relationship Between Select Labour Market Variables and Economic Growth: An Investigation for Some South and Southeast Asian Nations

Abstract

The role of labour in economic theory and national development has long been regarded as foundational. Traditionally identified as one of the primary factors of production, labour is often studied in conjunction with capital, land, and entrepreneurship. However, its role transcends that of a passive input. Labour interacts with, complements, and enhances the productivity of all other inputs, thereby playing a dynamic and irreplaceable role in the process of economic growth. This study investigates the impact of some labour market variables—specifically, the annual percentage growth rate of output per worker, mean weekly hours worked at the national level, and informal sector employment—on real GDP growth across eight South Asian and Southeast Asian countries: Bangladesh, Brunei, India, Indonesia, Laos PDR, Pakistan, Sri Lanka, and Timor-Leste. Relying on quantitative secondary data, the research employs statistical tools including ANOVA, t-tests, collinearity diagnostics, and correlation and covariance analysis to examine these relationships. Regression analysis reveals a high correlation coefficient (R = 0.947) and a substantial coefficient of determination (R² = 0.897), suggesting a strong explanatory power of the model. Results indicate that mean weekly hours worked have a marginally significant influence on real GDP growth; however, the relationships involving informal sector employment and labour productivity did not yield statistically significant results within the current model specifications—likely due to data limitations rather than absence of actual effects. Despite these constraints, existing literature supports the presence of meaningful connections among the studied variables. The findings underscore the necessity of integrating labour metrics into economic policy frameworks and highlight the critical role of informal employment in understanding regional growth patterns. This research contributes to the broader discourse on inclusive economic development and offers actionable insights for policymakers aiming to enhance labour market efficiency and sustainable growth in some emerging economies.