Employment Specialization in the Enlarged European Union

This paper presents the evolution of absolute employment specialization along the course of economic growth of EU–25 countries. We focus on the degree to which EU economies concentrate labor force in a few sectors/industries. We use disaggregated statistics classified according to NACE Rev. 1 division (71 sectors) and calculate various synthetic indices measuring the degree of diversification typical for the employment structures of EU15 countries (1970–2004) and ten NewMember States (1995–2004). Using nonparametric and semiparametric estimation techniques, we estimate the relationship between employment specialization and the development level, controlling for the inclusion of additional determinants of the diversification process. The main findings are in line with the trends revealed in analogical empirical studies using industrial data for international samples of countries: also within the enlarged EU there is a tendency towards decreasing absolute specialization of employment at initial phases of growth matched with an upward rising trend after over passing the GDP per capita level of about 16000 US $ (const 2000).