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Characterising deindustrialisation: An analysis of changes in manufacturing employment and output internationally


  • Fiona Tregenna


Deindustrialisation is typically conceptualised as a decline in manufacturing as a share of total employment. From a Kaldorian perspective deindustrialisation could have negative implications for long-run growth, given the special growth-pulling properties of manufacturing. However, defining deindustrialisation purely in terms of employment share is conceptually limiting given that some of the Kaldorian processes operate primarily through output rather than employment, as well as blunting empirical analysis by not focussing enough on changes in manufacturing share of gross domestic product (GDP). This study develops a new method using decomposition techniques to analyse changes in manufacturing employment levels and shares in 48 countries over periods of 'deindustrialisation'. The analysis separates out changes in the levels and shares of employment manufacturing into components associated with changes in the share of manufacturing in GDP, the growth of manufacturing value-added, the labour intensity of manufacturing production and economic growth. The results indicate that in most cases the decline in manufacturing employment is associated primarily with falling labour intensity of manufacturing rather than an overall decline in the size or share of the manufacturing sector. We suggest that deindustrialisation should appropriately be defined in terms of a sustained decline in both the share of manufacturing in total employment and the share of manufacturing in GDP. Copyright The Author 2008. Published by Oxford University Press on behalf of the Cambridge Political Economy Society. All rights reserved., Oxford University Press.

Suggested Citation

  • Fiona Tregenna, 2009. "Characterising deindustrialisation: An analysis of changes in manufacturing employment and output internationally," Cambridge Journal of Economics, Oxford University Press, vol. 33(3), pages 433-466, May.
  • Handle: RePEc:oup:cambje:v:33:y:2009:i:3:p:433-466

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    2. Randolph Luca Bruno & Elodie Douarin & Julia Korosteleva & Slavo Radosevic, 2014. "Technology choices and growth: testing and expanding the propositions of new structural economics in transition economies," UCL SSEES Economics and Business working paper series 127, UCL School of Slavonic and East European Studies (SSEES), revised Oct 2014.
    3. Murat Arsel & Servaas Storm, 2015. "Forum 2015," Development and Change, International Institute of Social Studies, vol. 46(4), pages 666-699, July.
    4. Lavopa, Alejandro & Szirmai, Adam, 2012. "Industrialization, employment and poverty," MERIT Working Papers 081, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    5. Szirmai, Adam & Verspagen, Bart, 2015. "Manufacturing and economic growth in developing countries, 1950–2005," Structural Change and Economic Dynamics, Elsevier, vol. 34(C), pages 46-59.
    6. Alex Sander Souza do Carmo & Augusta Pelinski Raiher & Alysson Luiz Stege, 2016. "Spatial concentration of Brazilian exports of manufactured products: a microregional analysis considering technological levels [Spatial concentration of Brazilian exports of manufactured products: a m," Nova Economia, Economics Department, Universidade Federal de Minas Gerais (Brazil), vol. 26(3), pages 747-774, September.
    7. Emanuele Millemaci & Ferdinando Ofria, 2014. "Kaldor-Verdoorn's law and increasing returns to scale: A comparison across developed countries," Journal of Economic Studies, Emerald Group Publishing, vol. 41(1), pages 140-162, January.
    8. Amat Adarov & Mario Holzner & Luka Sikic, 2016. "Backwardness, Industrialisation and Economic Development in Europe," wiiw Balkan Observatory Working Papers 123, The Vienna Institute for International Economic Studies, wiiw.
    9. Castillo, Mario & Martins, Antonio, 2016. "Premature deindustrialization in Latin America," Desarrollo Productivo 205, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    10. repec:mje:mjejnl:v:12:y:2017:i:2:p:93-106 is not listed on IDEAS
    11. repec:eee:streco:v:45:y:2018:i:c:p:49-63 is not listed on IDEAS
    12. Tregenna, Fiona, 2015. "Deindustrialisation, structural change and sustainable economic growth," MERIT Working Papers 032, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    13. Jaime Sobrino, 2013. "Urban demographic growth: the case of megacities," Chapters,in: Handbook of Research Methods and Applications in Urban Economies, chapter 14, pages 343-371 Edward Elgar Publishing.
    14. Neil Dias Karunaratne, 2013. "The mining boom, productivity conundrum and monetary policy design to combat resource curse effects in Australia," Discussion Papers Series 504, School of Economics, University of Queensland, Australia.
    15. Low, Sarah A., 2017. "Rural Manufacturing Resilience: Factors Associated With Plant Survival, 1996-2011," Economic Research Report 262184, United States Department of Agriculture, Economic Research Service.
    16. Flavio Vilela Vieira & Ana Paula Macedo De Avellar & Michele Polline Verissimo, 2014. "Indústria E Crescimento: Análise Depainel," Anais do XL Encontro Nacional de Economia [Proceedings of the 40th Brazilian Economics Meeting] 078, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    17. repec:ibn:ibrjnl:v:10:y:2017:i:10:p:102-105 is not listed on IDEAS
    18. Tregenna, F., 2009. "Contracting Out of Service Activities and the Effects on Sectoral Employment Patterns in South Africa," Cambridge Working Papers in Economics 0906, Faculty of Economics, University of Cambridge.
    19. Vinicius Cardoso De Barros Fornari & Rogério Gomes, 2016. "Mudanças Recentes Nas Relações Intersetoriais: Um Exame Das Atividades De Serviço E Industriais A Partir Da Análise De Insumo-Produto E De Redes," Anais do XLIII Encontro Nacional de Economia [Proceedings of the 43rd Brazilian Economics Meeting] 160, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    20. Lengyel, Imre & Lengyel, Balázs & Vas, Zsófia & Szakálné Kanó, Izabella, 2016. "Az újraiparosodás térbeli kérdőjelei Magyarországon
      [Territorial questions of reindustrialization in Hungary]
      ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(6), pages 615-646.
    21. Tregenna, Fiona, 2011. "Manufacturing Productivity, Deindustrialization, and Reindustrialization," WIDER Working Paper Series 057, World Institute for Development Economic Research (UNU-WIDER).
    22. repec:scm:ecofrm:v:5:y:2016:i:s:p:6 is not listed on IDEAS
    23. Tregenna, Fiona, 2008. "Sectoral Engines of Growth in South Africa: An Analysis of Services and Manufacturing," WIDER Working Paper Series 098, World Institute for Development Economic Research (UNU-WIDER).

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