The Employment Impact of Differences in Dmand and Production
AbstractWe use input-output techniques to assess the contribution of patterns of final demand and consumption to the differing employment rates observed across six industrialized economies. The key concept utilised is the employment generated economy-wide in supplying each product or service to final demand, including all stages in the supply chain - the concept of the ëvertically integrated sectorí (VIS). The main conclusions are: (1) On a VIS basis the relative employment-friendliness of demand in individual sectors remains fairly constant over time within countries and fairly similar across countries. The European economies are rather more similar to each other than to the US. (2) The employment-intensities of services and manufacturing are broadly equal, when measured on a VIS basis. (3) Final demands originating in both manufacturing and services are increasingly generating jobs located in services. (4) The changing patterns of final demand have been significantly employment-friendly in the European economies, but employment-neutral in the US. The final demand mixes of the European economies are more employment-friendly than the US pattern. The demand mixes of all the European countries would raise US employment, while the US mix would result in lower employment in the European economies. (5) The changing mix of consumption has been significantly less employment-friendly than final demand, and only a minor source of employment growth within each economy. The European consumption patterns tend to be less employment-friendly than that of the US. The consumption patterns of France and Germany would reduce US employment by 3-5% respectively, while those of the UK and Spain would have little effect. Conversely, if the US consumption mix were adopted in the European economies employment there would be 2-4% higher. (6) Demand growth has been the major source of employment growth, offset by job losses through labour productivity gains. Structural change along the supply chain, including outsourcing, both creates and destroys jobs, with only a small net effect. In the US stronger demand growth has brought more job creation, while weaker productivity gains have been less job-destroying than in the European economies. These are the major factors, which have opened up the employment gap.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by AIAS, Amsterdam Institute for Advanced Labour Studies in its series DEMPATEM Working Papers with number wp10.
Date of creation: Feb 2004
Date of revision:
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-07-26 (All new papers)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Baumol, William J & Wolff, Edward N, 1984.
"On Interindustry Differences in Absolute Productivity,"
Journal of Political Economy,
University of Chicago Press, vol. 92(6), pages 1017-34, December.
- Baumol, William J. & Wolff, Edward N., 1984. "On Interindustry Differences in Absolute Productvity," Working Papers 84-03, C.V. Starr Center for Applied Economics, New York University.
- David Card & Richard B. Freeman, 2002.
"What Have Two Decades of British Economic Reform Delivered?,"
NBER Working Papers
8801, National Bureau of Economic Research, Inc.
- David Card & Richard B. Freeman, 2004. "What Have Two Decades of British Economic Reform Delivered?," NBER Chapters, in: Seeking a Premier Economy: The Economic Effects of British Economic Reforms, 1980-2000, pages 9-62 National Bureau of Economic Research, Inc.
- Feinstein, Charles, 1999. "Structural Change in the Developed Countries during the Twentieth Century," Oxford Review of Economic Policy, Oxford University Press, vol. 15(4), pages 35-55, Winter.
- Erik Dietzenbacher & Bart Los, 1998. "Structural Decomposition Techniques: Sense and Sensitivity," Economic Systems Research, Taylor & Francis Journals, vol. 10(4), pages 307-324.
- Greenhalgh, Christine & Gregory, Mary, 2001. " Structural Change and the Emergence of the New Service Economy," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 63(0), pages 629-46, Special I.
- C.J. Krizan & John Haltiwanger & Lucia Foster, 2002.
"The Link Between Aggregate and Micro Productivity Growth: Evidence from Retail Trade,"
02-18, Center for Economic Studies, U.S. Census Bureau.
- Lucia Foster & John Haltiwanger & C.J. Krizan, 2002. "The Link Between Aggregate and Micro Productivity Growth: Evidence from Retail Trade," NBER Working Papers 9120, National Bureau of Economic Research, Inc.
- Ronald Schettkat & Joep Damen, 2004. "Demand Patterns and Employment Structures an Aggregate Analysis," DEMPATEM Working Papers wp11, AIAS, Amsterdam Institute for Advanced Labour Studies.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiemer Salverda).
If references are entirely missing, you can add them using this form.