Economy Globalization Role in the Employment of Service Sector

This study uses time series data related to employment, wages, capital costs and value added to estimate labor demand function in aggregate economics in three sectors, i.e. service, industry and agriculture categorized by skilled and unskilled and in service sub-sectors. So as to anticipate economy globalization impacts on employment in the framework of three outcomes namely capital entrance, trade liberalization and information and communication technologies (ICT) growth, two other variables, i.e. economy openness and the capital stock in transportation and telecommunication sectors are added to the model. The results indicate that the impact of information and communication technologies (ICT) growth on employment is positive while the impact of trade liberalization or economy openness level was intangible; the impact of capital entrance, owing to capital-labor complementary relationship, is evaluated as positive. Therefore the result of the three outcomes mentioned as a whole on employment is considered positive. Moreover, the positive impacts of these indicators on skilled labor are more than that of unskilled labor. Besides, the positive role of economy openness level in skilled labor employment in the service sector is ranked the first. As far as service sub-sectors are concerned, it could be claimed that our banking and insurance systems as well as transportation and telecommunication systems not only would be affected in interaction with global economy, but the way would be paved for the increase of businesses and employment opportunities in these sectors.