Employment elasticities describe the composition of labor within the labor market employed in industrial sectors. Each sector provides different employment capacities depending on its nature, whether labor or technology inten:;:ive (Rangarajan, 2006). Labor intensive industries use ' . many workers in their production process. On the other side, industries that are technology intensive empioy less manpower. Theoretically, when supply of workers exceeds demand, unemployment appears. When unemployment is high, it has a negative impact on the economy. Unemployment is commonly experienced by every country in the world. It often emerges to become a serious problem particularly in less developed countries even in normal global economic conditions. Growth of industrial sectors is the key to unemployment reduction (higher job creation). Industrial growth is expected to be greater than labor force growth. In fact, it is empirically difficult to find conditions in le.>s developed countries where industries provide enough jobs for workers. Production capacity growth determines the capacity of industries to support job availability. Islam (2009) said that the higher growth of industries with a labor intensive nature would increase the amount of labor employed. This is called "employment intensity of economic growth" (measured hy employme!1t elasticities with respect to GOP). In actual conditions, it is empirically found that industries that are more labor-intensive have lower productivity. This is reflected by their low contribution either to the national output (GOP) or to the regional output (GRDP). These sectors generally are agriculture and small scale trade or house hold industries. These sectors are characterized by low technology use and more workers. Meanwhile, sectors such as manufacturing and services have relatively higher productivity. Of course, this is because these sectors are technology intensive and are more productive in terms of production processes tor producing goods and services. ' . Islam (2009) argued that labor productivity and labor intensity have an inverse relationship, but efforts to achieve these two inverse sides simultaneously are very important for policy makers. So, it is crucial for government to consider the nature of each industry, specifically, whether it is labor intensive or a combination of labor intensive and productivityoriented, to induce output growth as well as employment.