The Employment Impact of Differences in Dmand and Production

year.⁵ The high value of the coefficients within each country, mostly between 0.7 and 0.9,
indicates that the employment-friendly industries in each country tend to remain the same over
time. Across countries the pattern of relative job creation also shows a substantial degree of
similarity. Moreover, the size of the correlation coefficients between countries conforms to the
general idea that European economies tend to be quite similar to each other, with correlations
all above 0.7, and less similar to the US, with correlations mostly lower than 0.7. Comparing the
European economies individually to the US, Germany appears to be the least similar, followed by
France, the Netherlands, and the UK with Spain, perhaps surprisingly, the most similar.

See Table 1

Employment at the level of the individual VIS is our basic building block. We turn now to
consider some more aggregate implications.

To calculate the correlations over the three periods within each country we had to do a small amount of sectoral
aggregation to achieve a common industry classification. Because of country specific data problems, notably the
absence of some industries from individual input-output tables, we have not computed the correlation coefficients
between countries for the earlier years.

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