The Effect of Technological Changes on Employment: Regional I-O SDA Approach

In this study, the Regional Input- Output Structural Decomposition Analysis (I-O SDA) is used to investigate the effects of technological changes on employment in Sistan and Baluchestan Province of Iran during 2006-2011. This paper develops the SDA method to decompose the technological change from two viewpoints of supply and demand for intermediate inputs in each sector. These changes from demand perspective is decomposed into changes in share of each sector in total intermediate inputs that are used by specific sector (input substitution effect) and backward linkage. From supply perspective these change is decomposed to share of each sector in total intermediate demand that is supplied by specific sector (selling structure) and forward linkage. The results show that changes in forward linkages of sectors caused to decrease of 127351 jobs in total employment. The effect of changes in backward linkages is negative in all sectors of economy and caused to decrease of 75581 jobs in regional economy.