The Effect of Changing Interregional Relationships on Employment Changes: A Decomposition Analysis in Two-Regional Input- Output Model

According to the regional economic literature, interregional communication can play an important role in production, followed by production-related variables such as employment. For this reason, changing (strengthening or weakening) inter-regional communication can lead to changes in production and employment in the regions. Accordingly, the purpose of this study is to investigate the change of regional spillovers and feedback coefficients on changes of regional employment in Sistan and Baluchestan province using a two-regional input-output model and structural decomposition analysis. Two-regional input-output tables including Sistan and Baluchestan province and other regions of the country in the years 2006 and 2011 were used as database of this study. The results of the model showed that the effect of changing spillovers and feedback coefficients on the total employment of the province is positive and caused to increase in total employment. The increase of total employment of the provincechr('39')s economy due to changes of these factors was 21,852 and 197, respectively. The effect of changes of these two factors on sectoral employment in the province has also shown that “Agriculture, Hunting, Forestry and Fisheries” have had the most positive effect from the change of both factors.