The sensitivity of estimated employment effects in input-output studies: An example of the use of marginal versus average coefficients

Abstract

This paper examines the sensitivity of calculations of the employment effects of manufacturing trade balance changes using an input-output framework. It reports the effects of varying the assumptions made concerning the use of average productivity coefficients. Using industrial productivity distributions, marginal coefficients are constructed and the differences in estimated employment effects are calculated when these are used. It is shown that results are indeed sensitive to the choice of coefficients used.