Abstract:
In the last two decades or more of research on changes in the structure of employment, three important phenomena have been identified. The first is deindustrialization, followed by jobless growth of industry in the formal sector as well as faster growth of services than industry.
In the face of these facts, it becomes problematic to evaluate this change. This is because it is not clear whether deindustrialization, when the demand for industrial production is steadily increasing, is detrimental or beneficial to the evolution of the employment structure and therefore economic development
The purpose of the study is to analyze changes in the employment structure of the economy, including the role of the share of industry in total employment, and the impact of these processes on the unemployment rate.
It is also hypothesized that jobless growth in the industrial sector generates a high unemployment rate.
The results of the analysis showed that the unemployment rate is most strongly determined by the share of industry in total employment. So that an increase in the share of industry in total employment leads to a significant decrease in the unemployment rate, and this is a regularity that does not depend on the level of GDP per capita. Hence, joblessness in the industrial sector will generate a higher level of the unemployment rate, and the other sectors of the economy will not be able to fully absorb the free labor pool (which will slow economic development for each country).
The study also indicated that the growing demand for industrial production determines an increase in the share of the industrial sector in total employment, which applies to economies at every level of economic development. However, competition from exports particularly intense for industrial production as a result of the increase in export volume (especially when there is an unfavorable balance of foreign trade at the level of the industrial sector) causes employment in the industrial sector to fall and the unemployment rate to rise.
