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Measuring the effects of changing structure on employment generation potential

Henderson, D.E.J. and McGregor, P.G. and McNicoll, I.H. (1989) Measuring the effects of changing structure on employment generation potential. International Regional Science Review, 12 (1). pp. 57-65. ISSN 0160-0176

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Abstract

This article describes a method for examining components of structural change in an open economy. A distinguishing characteristic of the method is that changes in external trade behavior are explicitly recognized as a separate component of structural change. The method is utilized to examine the effects of structural change on employment-generating potential in Scotland between 1973 and 1979. Overall, employment generation potential (employment multipliers per unit final demand) fell over the six-year period. Changes in import propensities and employment/output coefficients both led to reductions, but the negative contributions of these components were partially offset by increased use of intermediate inputs. For a number of industries, the changes in employment generation potential and the contributions of the individual components differed substantially from the Scottish average.