Using Input-Output Analysis to Identify Australia's High Employment Generating Industries

Abstract

The objective of this paper is to identify Australia’s high employment generating industries. It attempts to do this by using the 1996-97 input-output table. The direct and indirect contributions of the tradeable industries to employment are quantified by adopting the ‘loss of the industry’ or ‘shut-down of industry’ approach. Sectoral employment elasticities are then calculated to determine the leading employment generating sectors. This analysis sheds some light on sectoral potentials for the creation of jobs. We suggest, inter alia, that the following industries will play a crucial role in generating employment in the years to come: Retail Trade, Construction, Health and Community Services, Property and Business Services, and Education. These industries are not only the fastest growing and the largest sectors in terms of employment but also possess relatively higher employment elasticities.