The effect of aging on industrial employment share – Evidence from the European Union

This paper addresses the issues related to the ageing phenomenon. In particular, it focuses on the effect of aging, which is indicated as the proportion of 65+ people in the total population in a certain country, on the employment rate share of 9 different industries. Two models will be used for this, the fixed and random effect model. The data of the employment rate shares were taken from the International Labor Organization between 1975 and 2005 and the data on the ages of the people in 20 countries1 from Eurostat. The results show that the ageing effect will result in a shift from the manufacturing-like industries to the service-like industries. This has to do with the shifting demands when people are getting older