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[Vol.26 No.4] Korea’s Employment Embodied in Exports: a Multi-Regional Input-Output and Structural Decomposition Analysis

Group :
Economic Research Institute (82-2-759-5490) 2020.12.31 878
Authour: Tae-jin Kim(Korea Maritime Institute)
The purpose of this paper is to analyze the effects of exports on Korea's employment and to decompose driving factors of change in Korea’s employment embodied in exports (EEX). This study uses a multi-regional input-output (MRIO) and structural decomposition analysis (SDA) for empirical analysis, and uses a dataset of World Input-Output Tables (WIOTs) and Socio-Economic Accounts (SEAs) from the World Input-Output Database (WIOD). The main findings of the empirical results are summarized as follows. First, Korea’s EEX continues to increase and Korea’s share of EEX compared to total employment shows an upward trend. However, Korea’s employment inducement coefficient of value-added exports showed a downward trend during the 2000-2014 period. Second, final demand from three countries (China, the United States, and the Rest of the World (RoW)) has affected a significant portion of Korea's EEX. Finally, from the results of the SDA, the effect of changes in final demand was the most important driving factor for the increase in Korea’s EEX. Based on the results of this empirical analysis, this study discusses useful policy implications that could increase domestic employment in Korea.