Abstract: While the Chinese economy is growing rapidly, employment growth is relatively slow. It is necessary to clarify which factors affect employment changes. On the basis of the calculation of the number of employed people and skill composition in 97 major industries in China from 1995 to 2021, this paper adopts the global input-output analysis framework and the hierarchical structure decomposition method to decompose the employment changes in China from 1995 to 2021. The results show that due to the tendency of participating in labor-intensive links in the global value chain division of labor, the employment growth of highly skilled labor is slower than the average expansion speed of higher education, and the phenomenon of labor resource mismatch is more obvious. From 1995 to 2021, the domestic cycle consistently dominated employment growth, and after joining the WTO in 2001, the driving effect of the international cycle became more significant. However, after the outbreak of the global financial crisis, it gradually declined with the weakening of external demand. At the domestic demand level, the increase in consumption of technology intensive manufactured goods, labor-intensive service goods, and public service goods has a greater driving effect on employment, and has become more prominent since 2007. The employment driving effect of domestic consumption upgrading is significant. At the level of external demand, the increase in consumption of labor-intensive and technology intensive manufactured goods has a greater driving effect on employment, reaching its peak from 2001 to 2007 and then entering a downward trend. Based on this, it is recommended to steadily promote industrial upgrading to alleviate the problem of labor mismatch, increase residents’ income to expand domestic demand, and guide the improvement of consumption structure to promote employment growth. Attention should be paid to preventing and controlling the impact of international production transfer and changes in consumption structure on the employment market.

Key words: employment, dual circulation, final demand, consumption structure