This study examines the impact of the shipbuilding industry crisis in 2015 onlocal employment in Geoje-si and Tongyeong-si by applying the syntheticcontrol method. Our main focus is given to individual entrepreneurs’ totalemployment in Wholesale/Retail, Food/Lodging, and Service sectors. Ourresults show that local employment decreases in both cities, but theemployment of wage workers drops more sharply than the employment ofself-employed counterparts. A placebo effects test confirms that significantdecreases in the employment of Food/Lodging and Service sectors in Geoje-si,but in Tongyeong-si, the negative impact is observed only in Food/Lodgingindustry. We also observe that the reduction rates of Service sector's totalemployment and wage-workers in Geoje-si are 1.4 times larger than those ofFood/Lodging sector.