Leading Sectors, Structural Transformation, and Labor Absorption in Regional Economies

Taufiki Bidullah; Patta Tope; Yunus Sading

doi:10.61255/jeemba.v4i5.1973

Authors

Taufiki Bidullah Universitas Tadulako, Indonesia
Patta Tope Universitas Tadulako, Indonesia
Yunus Sading Universitas Tadulako, Indonesia

DOI:

https://doi.org/10.61255/jeemba.v4i5.1973

Keywords:

Employment Elasticity, Labor Absorption, Leading Sectors, Regional Economy, Structural Transformation

Abstract

Purpose – This study examines sectoral advantages, structural transformation, and the capacity of leading economic sectors to generate employment. It focuses on the mismatch between sectoral economic performance and labor absorption in regional development.

Design/methodology/approach - This study employs a comparative quantitative-descriptive approach using constant-price GRDP and employment data for 2020–2024. Location Quotient and Shift-Share analyses are combined with employment elasticity, labor share, structural gap, and the Employment Intensity Index to evaluate sectoral competitiveness and the output-employment relationship.

Findings/Results - The findings reveal substantial heterogeneity in sectoral transformation. Mining and manufacturing dominate several regional economies, but strong output performance does not consistently generate proportional employment. Of 18 district-sector combinations, 55.6% are classified as inelastic, 33.3% experience jobless or labor-shedding growth, and only 11.1% are elastic. The largest structural gap occurs in manufacturing, where output contribution substantially exceeds labor absorption.

Originality/Value - This study demonstrates that sectoral competitiveness does not necessarily translate into job-intensive growth. The findings highlight the need to integrate sectoral development with local economic linkages, downstream activities, MSME development, workforce skills, and employment creation.

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