Labor Market Efficiency as One of the Pillars of the Global Competitiveness of an Economy - Conclusions for the Labor Market Regimes of the EU Countries

IntroductionNowadays, not only entrepreneurships, as participants of markets, but also domestic economies compete with one another, however, such an approach stirs up controversies. Not only political leaders, but also journalists and international institutions are interested in economy competitiveness. One of the most frequently cited definitions of economy competitiveness is the one proposed by WEF. It constitutes a multifaceted and comprehensive proposal towards its measure. One of the elements of economy competitiveness in such a definition is "labor market efficiency". The goal of this paper is to clarify this category (as it is one of the competitiveness pillars of the economy) and to present the mechanisms with which help LME influences the level of economy's productivity and therefore its competitiveness. Despite various elements constituting LME in the approach of WEF, this value appropriately describes the theoretical relation between the labor market in a given economy and its competitiveness. It may be helpful for the evaluation of any labor market regime used in a given economy in order to determine which one favors high economies competitiveness. In this article, such evaluation has been made on the basis of arithmetic mean of the LME index and its constituents for given the EU countries.1. The notion and measurement of economy competitiveness in the approach of The World Economic Forum, the value of "labor market efficiency"In literature, there are many different definitions of economy competitiveness (macro- competitiveness). In some books, the performance of a given economy in the international exchange, especially in export, has been emphasized and such competitiveness is known as competitive position (Piotrowski, Zenka 2009, p. 130). In others, such results are usually combined with the level of wealth developed in a particular economy and are understood as a constant improvement of life standards or the growth of real gross income (Olczyk 2008, p. 14). The competitiveness on the macro-economic level may be identified with the country's competitive power, which is the ability to maintain long-term economic development, enabling the economy to enjoy profits from the international economy's cooperation. It is also known as factor competitiveness (Bossak 2006, p. 81; Gorynia 2009, p. 70). The improvement of competitiveness in such an approach is connected with the factors that decide about enterprise, investments, technology progress, production factors efficiency and the quality of management (Bossak 2006, p. 81). While discussing the core of national economies' competitiveness, it has been stated that productivity is the basis and the process of competitiveness takes place mainly on production factors' markets where the country's policy plays the main role (Brocka-Palacz 2008, p. 35). Some organizations developed their own definitions of economy competitiveness. One of them is the one proposed by WEF. The competitiveness of economy in the approach of WEF is defined as: "[. ] set of institutions, policies, and factors that determine the level of productivity of a country" (Sala-I-Martin, Artadi 2004, p. 51). The level of productivity which has been reached by a given economy assumes that such an economy is able to develop an appropriate level of prosperity. The more competitive economy, is the one that manages to provide its citizens a higher level of income. Productivity and the possibility to enlarge it are key issues in the analysis of economy competitiveness. The definition offered by WEF is an example of such an approach to competitiveness in which factors with the elements of result-based approach play a great role. This kind of interpretation is present within research on competitiveness that are conducted on the basis of the growth theory (Olczyk 2008, p. 15). The Global Competitiveness Index (GCI) is published in the yearly Global Competitiveness Reports (GCR). …