GDP growth rate, tourism expansion and labor market dynamics: Applied research focused on the Italian economy

Abstract

This paper focuses on the Italian economy and investigates the causal nexus between economic growth, tourism development and labor market dynamics. We performed a two-step analysis. In the first step, we evaluate whether tourism stimulates Italian economic growth or if it is the economic growth that promotes tourism expansion. To get the goal, we use panel data from 1997 to 2019 concerning the GDP and overnight stays in each Italian region. We performed the Granger causality test on the whole panel and analyzed a panelvar model. In the second step, after having established the relationship between the two variables of interest, we extended our analysis to investigate—throughout the estimate of the employment intensity of growth and the impact of GDP growth on employment, at both aggregate and disaggregate level. The main findings of our analysis are as follows: a) the existence of a unidirectional causality going from economic growth to tourism development (i.e., validation of economic-driven tourism growth hypothesis), and b) a significant estimated magnitude of the (average) employment intensity of growth.