An Extension of Input–Output Employment Models

Abstract

The usual input–output models of the labour market include some weaknesses which restrict their use with regard to analyses of concrete employment problems. The most important of these weaknesses are: (1) the assumption of an absolutely homogeneous labour force; (2) sectoral final demand is the only starting point for economic policy making; (3) if several types of labour are included, a non-substitutability between these types of labour is assumed; (4) there exists a one-sided direction of analysis from the economic policy parameters to the employment variables. In this article we propose some classes of models which try to overcome the above cited weaknesses. Furthermore these models allow us to take into account different useful economic constraints. To show the applicability of our models at the end of the article some empirical results for a small region are introduced.