IDEAS home Printed from https://ideas.repec.org/p/aia/dempat/wp10.html
   My bibliography  Save this paper

The Employment Impact of Differences in Dmand and Production

Author

Listed:

Abstract

We 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.

Suggested Citation

  • Mary Gregory & Giovanni Russo, 2004. "The Employment Impact of Differences in Dmand and Production," DEMPATEM Working Papers wp10, AIAS, Amsterdam Institute for Advanced Labour Studies.
  • Handle: RePEc:aia:dempat:wp10
    as

    Download full text from publisher

    File URL: http://archive.uva-aias.net/uploaded_files/publications/dempatem_WP10.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Robert Gordon, 1995. "Problems in the Measurement and Performance of Service-Sector Productivity in the United States," RBA Annual Conference Volume,in: Palle Andersen & Jacqueline Dwyer & David Gruen (ed.), Productivity and Growth Reserve Bank of Australia.
    2. 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.
    3. 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.
    4. 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 629-646, Special I.
    5. 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 1017-1034, December.
    6. 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.
    7. Erik Dietzenbacher & Bart Los, 1998. "Structural Decomposition Techniques: Sense and Sensitivity," Economic Systems Research, Taylor & Francis Journals, vol. 10(4), pages 307-324.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ronald Schettkat & Joep Damen, 2004. "Demand Patterns and Employment Structures an Aggregate Analysis," DEMPATEM Working Papers wp11, AIAS, Amsterdam Institute for Advanced Labour Studies.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aia:dempat:wp10. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiemer Salverda). General contact details of provider: http://edirc.repec.org/data/aiuvanl.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.