Study Of The Relationship Between Industrial Structure And Employment Structure

This article use three economic indicators, the employment elasticity、the indexes of the structure deviation and the organic composition of capital, two econometric models to testify our four conclusions.The employment elasticity data indicates that the increase of GDP has positive effect on employment in second and tertiary industry, otherwise, the increase of GDP drive the employment down in primary industry.The indexes of the structure deviation data shows that labor force transfer from primary industry to second and tertiary industry, especially tertiary industry, which means tertiary industry will absorb the largest workers. And this is exactly our first conclusion.We can find that the main reason of labor transfer is the different organic composition of capital between three industries.Then comes the three models. In the first model, we put the quantity of employment L dependent variable, and, put the direction of industrial structure change STRE、the speed of industrial structure change STRK independent variables. The second model is just same as the first model except we put the organic composition of capital CAP independent variables. The result of the first and the second regression is STRE、CAP change the same direction of L, while STRK does the opposite.So we get our second conclusion: the change of industrial structure is both a help and a hindrance for employment. We add a dummy variable, the organic composition of capital D,and two interaction terms between D and STRE、STRK to the model where STRE、STRK and D appear separately.The result of this regression shows the intercept of D and ln(STRK)*D is positive, while the intercept of ln(STRE)*D is opposite. In other word, when D=l,which means the organic composition of capital increase, the coefficients of the intercept、STRK go up and STRE go down. This proved our third and forth conclusion:the improvement of organic composition of capital has double effect on employment---both a creation and a damage, and this creation effect will offset part of the help that the change of industrial structure bring to employment, while the damage effect will also offset part of the hindrance that the change of industrial structure bring to employment.Then we compare the data of China with US、Japan and Russia. And we find four countries all remain a phenomenon that labor force transfer from primary industry to second and tertiary industry. The proportions of tertiary industry increase and become the largest. This phenomenon also proved our first conclusion. The comparison also shows organic composition of capital changes the same direction of employment.Finally, we give our policy advices.