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Employment Allocation: from Branches to Extended Subsystems

Author

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  • Ana-Isabel Guerra
  • Ferran Sancho

Abstract

Interindustry data report employment levels by activity branch. Subsystems, as first introduced by Sraffa (1960), enable the partition of the productive network into distinct components associated with the production structure of a specific good, treating it as if it were isolated from the rest of the economy. In this paper, we propose a generalization of the standard subsystem concept that incorporates endogenous employment requirements arising from the output-labour-consumption links, which are typically overlooked. This extension allows employment to be allocated from branches to subsystems and enables the decomposition of employment levels into standard subsystem effects and induced subsystem effects.

Suggested Citation

  • Ana-Isabel Guerra & Ferran Sancho, 2025. "Employment Allocation: from Branches to Extended Subsystems," Working Papers 1493, Barcelona School of Economics.
  • Handle: RePEc:bge:wpaper:1493
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    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • B51 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Socialist; Marxian; Sraffian

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