Macroeconomic Consequence of Deindustrialization- The Case of Korea in the 1990's -(Vol.7 No.2)
Du Yong Kang
Economist, Korea Institute For Industrial Economics&Trade email@example.com
Deindustrialization affects economic growth and its fluctuations because both productivity growth and volatility differ between the industrial sector and the service sector. This paper investigates the effect of deindustrialization in the Korean economy on its growth and fluctuations. The estimation shows that the one year labor shift effect is a 0.2%p(narrow manufacturing) ~ 0.45%p(broad manufacturing) decrease in annual average economic growth, and the cumulative labor shift effect is a 0.4%p ~ 0.6%p decrease. Meanwhile, comparing the year 2000 with the year before the start of deindustrialization, it is estimated that deindustrialization reduced the volatility of employment by about 10%.