What Is the Impact of the Manufacturing Sector Output and Sub-sector Employment Growth on the Labour Absorption and Participation Rates?

Abstract

What is the impact of the manufacturing sector output and sub-sector employment growth on the labour absorption and participation rates? We find that positive employment growth shocks in all the manufacturing sub-sectors result in an increase in the manufacturing sector employment growth, labour participation and absorption rates, albeit at differing degrees. For instance, we find that the manufacturing sector employment growth is more responsive to employment growth in the textiles, food and non-metallic products, basic metals products, wood, transport equipment and furniture products sub-sector employment growth shocks over longer horizons. In addition, the labour participation and absorption rates are more responsive to positive employment growth in the food, textiles, wood and refined petroleum, transport equipment and electrical machinery products.