Employment in the public sector and its impact on the economic performance of V4 countries

Abstract

The aim of this study is to analyze the impact of public sector employment on the economic performance of the Visegrad Four (V4) countries—the Czech Republic, Hungary, Poland, and Slovakia—over the period from 2010 to 2023. The research specifically focuses on employment in key public service sectors, including public administration, defense, education, healthcare, and social services. These sectors are examined in relation to three fundamental macroeconomic indicators: Gross Domestic Product (GDP), Gross Value Added (GVA), and collective government consumption. A quantitative research approach was adopted, utilizing comprehensive data from Eurostat. The methodology includes time series analysis, descriptive statistics, regression and correlation analysis, as well as ANOVA tests to assess the statistical significance of the observed relationships. The findings reveal a consistently strong and positive correlation between the number of public sector employees and the selected macroeconomic indicators across all four countries. This suggests that public sector employment plays a significant role in supporting and potentially enhancing economic performance. The study addresses a notable research gap, as most existing literature tends to focus on national-level analyses and often overlooks the broader, comparative perspective. Furthermore, the role of the public sector as a direct contributor to economic value creation is frequently underrepresented in economic discourse. By offering a cross-country comparison, this research contributes a novel viewpoint on how public employment influences economic outcomes. In addition, the study lays the groundwork for future research, particularly in exploring how ongoing trends such as digitalization and the integration of artificial intelligence may reshape employment structures and productivity within the public sector. These developments could have profound implications for both employment policy and economic strategy in the V4 region.