Cross-country analysis of high employment-generating industries

Abstract

The objective of this paper is to identify high employment industries in Australia, Japan and the USA using input–output (IO) analysis. It is found that (1) the high and low employment-generating industries in 1980 and/or 1990 are almost the same as those in 1997. Thus on a relative basis, there is no evidence that high employment-generating industries have changed since 1980; and (2) the high and low employment-generating industries are very similar across these three countries. Four of the consistently high employment-generating industries in these countries are Food, Beverage and Tobacco; Chemicals, Petroleum, Coal, Rubber & Non-Metallic Minerals; Basic Metals/Fabricated Products; and Electricity, Gas and Water, with the first three industries being part of manufacturing.

Notes

¹ If one country was being analysed and the IO tables for the different years were all expressed in constant prices, the employment multiplier formula would be appropriate.

² It is acknowledged that these calculations, while unit free, do not provide guidance about the so-called bang for a buck since the nominal value of the extra output generated by one additional employee in industry j will reflect the productivity of labour, other input costs and the profit margin.

³ An hours-based measure of employment would have been preferred, or at least one that differentiated between part-time and full-time employment, but such data are not available for Japan.

⁴ Conway (1977) notes that there are a number of possible causes of changes in the multipliers over time namely: technological change; increasing (or decreasing) benefits from scale of production (scale economies); changes in product composition (within industrial sectors) including entirely new products (or loss of products); closure (opening) of entire branches of industries; changes in relative prices; and input substitution as a result of response to price changes or technological change.