Ⅰ. Background and Purpose
□ Employment shock from the manufacturing sector is partially absorbed and offset at the national level, but the ability to absorb rapid decrease in manufacturing jobs is limited at the local level.
◦ The purpose of this research is to provide an in-depth diagnosis of employment shocks in localities and transfer dynamics to other localities, as well as policy response measures to address local employment issues.
Ⅱ. Main Context and Results 1. Research Context
Threats in Manufacturing Sector and Measures to Create Local Jobs: with Focus on Employment Crisis Regions
▸Research Lead: Ho Young Oh, Senior Research Fellow Tel: 044-415-5326 / e-mail: [email protected]
Summary
□ Local job creation is a key objective to revitalize many localities facing the risk of local obsolescence resulting from low birth and aging demographics. Localities without youth can only lose vitality and youth settlement based on local workplaces serves as the foundation for local revitalization. This report investigates policy improvement measures with focus on regions with employment crisis, applying methodologies such as quantitative analysis, Delphi analysis, and expert meetings to derive local job creation plans.
▸Key Words: Local Workplace, Manufacturing, Job Creation, Employment Crisis Regions, Panel Analysis
□ Conduct in-depth analysis of the local impact and transfer dynamics to other localities of local manufacturing sector employment shocks, and derive local workplace creation policy alternatives based on the analysis.
◦ “Employment Survey by Region,” prepared by Statistics Korea, is used as the primary data source for time series observations on trends in local population and employment changes with focus on localities with employment shocks. Regional level panel resources were created and carried out an in-depth analysis on the manufacturing sector‘s impact on local employment by applying panel analysis methodology.
◦ Identify, through dynamic analysis, the scale of direct impact caused by manufacturing sector employment shocks from certain localities, certain industries. Triangulate the scale of spread such shocks have on other localities and other industries through local industry relationship analysis.
2. Research Results
□ Manufacturing sector employment changes that occur locally have a statistically meaningful impact on local employment.
◦ Analysis of the relationship between weight of manufacturing jobs and employment rate through the application of Granger Causality in panel data show statistical significance.
◦ Panel vector autoregression model predicts that a one standard deviation shock in weight of local manufacturing sector in overall employment show a positive relationship with local employment rate from 1-7 years.
◦ After deriving a matrix of exogenous method applied inducement coefficients for at-risk industries from employment shock localities utilizing an interregional industry relationship table, the aftermath effects on both local and inter-regional employment triggered by manufacturing sector employment shocks are predicted.
Ⅲ. Conclusion and Policy Suggestion
1. Develop local employment models and establish a local employment governance
system
□ Develop a local employment model that is aligned with the local natural resources and workplace environment; and based on this model, a systematic and strategic approach to converge local competency is called for.
2. Create ‘(tentative name) Local Employment Development Center’ and enact
‘employment free zone‘ built on local consensus
□ Top experts in industry, employment, locality, population, and social welfare to derive measures to create locally tailored jobs, and introduce expert counseling support for local job creation.
□ Building on local labor, industry, civic, and government agreement, enact and implement a ’labor-free zone’ system similar to the ’free trade zone’ of the 1970s.
∙ Related Ministry: Ministry of Employment and Labor
