FINANCIAL MECHANISMS OF EFFICIENT EMPLOYMENT STRATEGY IN AZERBAIJAN
Keywords:
Azerbaijan, efficient employment, financial mechanisms, macroeconomic equilibrium, unemployment.Abstract
This study empirically investigates the financial mechanisms underpinning efficient employment strategies in the transition economy of Azerbaijan for the period 2010–2024. Using the Keynesian “effective demand” framework and the NonAccelerating Inflation Rate of Unemployment (NAIRU) concept, the purpose of the article is to improve the financial mechanism of active labor market policy and innovative financing of ecosystems to ensure employment in Azerbaijan, while addressing the challenges of digitalization and the growing skills gap. The original scientific contribution of this paper lies in the development of a “Tripartite Hybrid Financing Model”, which integrates state funding, private sector investment, and educational infrastructure to mitigate the skills mismatch in the non-oil sector. The study expands the analysis by demonstrating the potential application of this model to European transition economies facing similar structural transformations.The research demonstrates that shifting from passive social transfers to investment-oriented employment insurance significantly increases the employment multiplier. Based on 2024 data, the study evaluates the impact of digital transformation on job creation efficiency. The findings provide a strategic roadmap for synchronizing monetary transmission with labor market requirements to ensure long-term macroeconomic stability.
JEL: J11, E24, J64.
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Received: March 13, 2026.
Reviewed: April 30, 2026.
Accepted: June 5, 2026.
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