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Analysis of the Structural Characteristics and Factors of Employment in the Manufacturing Industry

Author Min Seong-hwan, Hong Sung-wook, Kim Jae-duck, Oh Jong-seok Date 2017.12.19 Page

The manufacturing sector is one of particular significance in the Korean economy, but concerns have long been growing over the long-term sluggishness in employment and hiring in the industry. The total number of workers employed in the domestic manufacturing industry has been decreasing since the late 1990s; the share of manufacturing jobs as a percentage of total employment has dwindled; the employment-inducement coefficient of the industry has undergone a significant decline; the ability of the industry to create jobs seems to have noticeably weakened.


Yet more recently employment in the manufacturing industry has increased moderately, which has drawn attention to the background and possible causes of such recovery. It is notable that in the United State and Germany, both countries with strong manufacturing industries, that there has been a resurgence in manufacturing jobs since 2010. Although it is uncertain whether this trend will continue in the long term, efforts to identify structural changes in employment in the manufacturing industry should provide basic information on the kinds of policies that will be necessary to maintain stable employment.


This study looked at various characteristics of the structure of employment in the manufacturing industry and analyzed the relationship between employment and productivity and output, two major factors of employment. For the analysis of employment factors, this paper examined the current status of manufacturing employment in Korea using basic statistics and international comparisons. In addition, based on macroeconomic statistics, we conducted an empirical analysis of structural changes in the relationship between manufacturing employment and factors affecting such employment in the long term and, based on the statistics of Korean businesses, examined the characteristics that have emerged in specific sectors of the manufacturing industry.

This study is meaningful in that it attempted to analyze employment changes in the manufacturing industry and conducted empirical microeconomic and macroeconomic analyses to derive a comprehensive conclusion. However, given the lack of useful employment statistics amenable to longitudinal analysis and the difficulties in collecting statistics on specific sectors and employment in the short term, we were not able to perform a more elaborate analysis, constituting this study’s main limitation.?