Services in Regional Employment Change

Abstract

This article examines the role of services in regional employment change in Illinois from 1972-87. The approach applies recent advances in time-series analysis to investigate both the long-term and short-term relationship among employment in three sectors: goods production, export-potential services, and local services. The results indicate that there is not a long-term relation among these variables, i.e., that they do not move together in the long run. In the short term, the evidence is that employment in the service sectors follows employment change in goods production, although the response persists for only six months. The results suggest that a policy of targeting export-potential services is not likely to produce sustained employment growth in the other sectors.