Factors Decomposing Changes in Local Labor Productivity and the Effects of Industrial Structural Changes on Productivity Increase in the Low-Growth Era : Focusing on the Jeonnam Service Industry

Recently, our country has been experiencing a low-growth trend not only at the national level but also at the regional level, and is suffering from the double whammy of sluggish productivity in the service industry and a shrinking share of the manufacturing industry. In this study, we will examine the changes in the regional industrial structure of Jeonnam between 2006 and 2020, when low growth began to become entrenched at the local level, focusing on the service industry, and examine the productivity-enhancing effects of changes in the industrial structure through labor productivity factor analysis to suggest policy implications. As a result of the analysis, it was found that the decrease in the growth rate of labor productivity since 2010 during the period of 2006 to 2020, when low growth became entrenched in the Jeonnam regional economy, was mainly due to manufacturing, which is Jeonnam's main industry. In particular, the contribution of labor productivity of the 'industry effect' had positive (+) values in all service industries, but negative (-) values in manufacturing, showing a significant impact on the slowdown in labor productivity across all industries. In addition, when looking at the ‘inter-industry structural change effect’ in all industries, the static structural effect showed a positive (+) value for the entire period, but the dynamic structural effect showed a mixed pattern of negative (-) productivity effects for the entire period. In addition, the industries with the highest productivity increase effects in the service industry in Jeonnam were social services and producer services, and it is necessary to foster these industries through selection and concentration.