Rediscovering the Shift-Share EM2 Model: A Decomposition Framework of Unbalanced Employment Growth at the Industrial Level

Abstract

The unbalanced growth of employment among regions is ultimately attributed to the difference in industrial structure and industrial competitiveness. At the regional level, both shift-share EM1 and EM2 models can realize the purpose of the shift-share model, that is, thoroughly separate the effects of the industrial structure and industrial competitiveness on employment growth deviation. While the expectation is to further achieve a complete separation on employment growth deviation at the industrial level, the EM1 model is not competent, and this is precisely the role of the EM2 model—to separate the employment growth deviation caused by the differences in industrial structure and industrial competitiveness at the industrial level. Therefore, the shift-share EM2 model can realize the separation of the structural component and competitive component at the industrial level. In the process of industrialization, the manufacturing industry presents a significant trend of unbalanced growth in both spatial and industrial dimensions. The setting of the share component in the EM2 model covers the balanced growth of employment in both spatial and industrial dimensions. The allocation component is reinterpreted as the magnification or inhibition effect of industrial competitiveness on the initial industrial structure. In order to exclude the influence of the regional employment scale difference, the concept and calculation method of the regional deviation degree is put forward. Finally, the spatial pattern of unbalanced employment growth in China’s manufacturing industry from 1999 to 2019 was analyzed using the shift-share EM2 model at the regional level. The results show that the spatial imbalance trend of employment growth in China’s manufacturing industry is significant, the regional deviation scale of employment growth forms a north–south difference pattern, and the regional deviation degree forms a southeast to northwest difference pattern. Taking Sichuan Province as an example, the application of the shift-share EM2 model at the industrial level is demonstrated.