Revisiting Social Protection and Labor Policies: A Panel Data Analysis of Their Impact on Economic Growth

Abstract

This study comprehensively examines the impact of social protection and labor policies on economic growth using a panel data approach, incorporating a diverse set of countries and economic conditions. The empirical analysis reveals that social protection and labor policies do not exhibit a statistically significant effect on economic growth in the observed period. However, another key variable in the model demonstrates a strong and significant positive relationship with economic growth, highlighting the presence of alternative influential factors that drive economic performance. The findings suggest that while social protection and labor policies serve crucial roles in fostering social equity, stability, and workforce productivity, their direct contribution to economic growth remains limited in the analyzed framework. This underscores the complexity of economic growth determinants, where structural factors, institutional quality, technological advancements, and macroeconomic stability may exert a more pronounced influence. Additionally, the study raises important considerations for policymakers regarding the trade-offs between economic efficiency and social welfare objectives. Given the intricate nature of these relationships, further research is essential to explore the long-term implications of social protection and labor policies on economic development. Future studies should incorporate additional variables, such as innovation capacity, capital accumulation, and policy implementation effectiveness, to provide a more nuanced understanding of the interactions between social policies and economic growth. Expanding the dataset and employing alternative econometric techniques could also offer deeper insights into potential indirect effects and contextual variations across different economic environments.