The effects of structural transformations on labor markets in economy

The concept of the structural transformation has become an important issue as a result of the global transformations in the world economy. Nowadays, this structural transformation process is characterized as the combination of Neo-Liberalism, globalization, deindustrialization and financialization. Structural transformations and various developments on such issues as increased productivity, play an important role in economic growth. In the development process of economy, some sectors have more rapid growth that the other sectors as depending on the characteristic changes. In this process, the economic resources shift from the low productive sectors to more efficient sectors. Thus, the share of agriculture in total employment has been decreased gradually, whereas the share of industry, and subsequently, the services sector has been increased. At the same time, these structural changes compose the distinctive characteristics of the development process. In the study, the effects of structural transformations on the labor markets in OECD countries were analyzed. In the analyses, in addition to the static panel data models, dynamic panel data models were employed. The findings of the analyses showed that structural transformations in the economy have significant effects on the labor markets. It was also revealed that the increase in labor productivity lead to a decline in employment of industrial sector which result in the deindustialization, as expected. Keywords: Structural Transformation, Structural Change, Deindustrialization, Labor Market, OECD Countries