Economic sources of sectoral growth of employment
Osório, Carlos (Osório de Cerqueira
Master of Arts
The purposes of this thesis are to observe the recent evolution of the structure of employment between the manufacturing sector and the tertiary sector and to discuss the economic sources of sectoral growth. The prominent trend in developed countries is a higher increase in tertiary employment than in manufacturing employment. In the case of less developed countries too, this trend is visible, but there are exceptions. The empirical evidence produced shows that per capita income as an index of the "demand approach" does not serve to indicate the labor allocation between the manufacturing and tertiary sectors. Income-elasticities of demand which are also used by the "demand approach" seem to be counter-balanced by price effects. The fact of the high share of the tertiary employment and its fast growth in countries of different levels of productivity are explained by the "productivity approach" via the technological progress in favor of the manufacturing sector. The technological progress within sectors contributes to differential rates of sectoral productivity per worker. During the 196's the average productivity of labor increased more in manufacturing than in tertiary in both developed economies and less developed countries. The "employment multiplier" used by the "employment approach" is analyzed for short-run time series for several countries. The results clearly indicate that the employment changes in manufacturing and tertiary have different trends in different countries. Some "multipliers" are negative and some are not significantly different from zero. The great importance of tertiary sector in the process of labor allocation in less developed countries is basically explained by the form of technological advance that has been characterized by the adoption of labor saving technology in the manufacturing sector. The low increase in the demand for manufacturing labor generated by the growth of manufacturing production and the rural-urban income differential cause the filtering into the tertiary activities of the labor shifted from rural sectors and from the decreasing artisan segment of manufacturing. These arguments are observable via the study of the different nature of the sectoral employments.