Employment Multipliers Research Articles

Aerospace Place-Based Policy: The Impact of Boeing on South Carolina's Aerospace Industry

South Carolina offered Boeing nearly $1 billion to locate a 787 Dreamliner assembly plant in North Charleston, which opened in 2011. Using difference-in-differences and synthetic difference-in-differences estimators, the author finds a substantial impact of the plant on South Carolina's aerospace employment (311% or 6,000 jobs), wages (10%), and establishments (44%) in the subsequent decade. The estimated number of aerospace jobs generated by the plant exceeds Boeing's 3,800 promised jobs. However, much of the state's aerospace establishment growth does not appear to be directly related to the Boeing plant, with most of it occurring in the upstate region (Greenville, Spartanburg) late in the treatment period. An analysis of the Charleston metropolitan area's economy reveals a 5-year local employment multiplier of 2.6 per promised job.

The Social Economic Contributions of NIPSCO (Northern Indiana Public Service Company) to Northwestern Indiana: A Brief Economic Report Analysis

This brief economic report analysis highlights that NIPSCO is an important economic driver in Northwestern Indiana due to their high investments, including purchases of goods and services, and employing a highly skilled labor force. NIPSCO’s significant capital investments develops a modern and reliable energy generation and distribution infrastructure, and hence in turn supports the region’s economic development. In addition, both GDP and employment multipliers for NIPSCO demonstrate that due to the energy industry in Northwestern Indiana, NIPSCO creates more additional GDP and jobs in other industries in the region. In short, this brief economic report analysis shows that NIPSCO makes significant social economic contributions to the region’s economy in Northwestern Indiana.

Local employment multiplier: Evidence from relocation of public-sector entities in South Korea

We exploit a series of public-sector entity relocations in South Korea as an exogenous source of variation in public sector employment to estimate the local employment multiplier. We find that the introduction of one public sector employment position increases private sector employment by one unit, primarily driven by the service sector. Consistent with existing literature, we document that the effect of public employment on private employment is highly localized. In addition to changes in private employment, we also discover that the relocations led to a positive net influx of residents into the treated neighborhoods; this effect is also localized. Lastly, by estimating the local employment multiplier for each relocation site, we document the heterogeneity of the local employment multiplier and provide suggestive evidence that this heterogeneity is shaped by the local economic environment’s capacity to accommodate additional general equilibrium responses.

Local employment multipliers for large publicly subsidized firms: Evidence from a synthetic control approach

AbstractThis paper provides estimates of local employment multipliers from large, publicly subsidized firms. We use a synthetic control weighted difference‐in‐difference estimation procedure that matches treated areas with comparison areas to generate local employment multiplier estimates. We show that local employment multiplier estimates have a high degree of uncertainty, with a wide range of point estimates (both positive and negative) and varying degrees of statistical significance. There is a concentration of positive employment multipliers from manufacturing facilities, but little correlation between estimated multipliers and subsidy value. We demonstrate that our approach produces drastically different results than a traditional difference‐in‐difference approach.

Local Employment Multiplier: Evidence from Relocation of Public-Sector Entities in South Korea

Local Employment Multiplier: Evidence from Relocation of Public-Sector Entities in South Korea

The regional employment implications of a net-zero economy in Costa Rica under uncertainty

This study estimates job creation from Costa Rica's transition to net-zero emissions by 2050, contrasting it with a business-as-usual scenario (BAU) using employment multipliers from Costa Rica’s input–output matrix. The model is soft-linked with a bottom-up technology‒rich regional model of the CLEW sectors in Costa Rica. A robust decision-making-inspired approach is taken to assess the effects of uncertainty on the estimations. The study addresses a literature gap in modeling subnational employment while accounting for long-term uncertainty and allows to identify economic activities affected by the transformation, so that policies regarding a just transition can be properly developed and stakeholders incentivized to take active participation in the process. Under baseline assumptions, a net-zero economy would have 135 thousand more jobs by 2050 than the BAU, equivalent to 7% of the employed population in 2017. Energy-related jobs would triple by mid-21st century, and regions capitalizing on renewables would perceive the highest gain. When considering uncertainty, the net jobs range between 35‒750 thousand. Since net positive outcomes in terms of jobs are feasible, global governance should focus efforts on policies that enhance these.

Multipliers and Supermultipliers in a Multisectoral Framework: Macroeconomic Tools After All?

ABSTRACT The paper starts showing that the common mistake of considering Keynesian income and/or employment multipliers as sector-specific, in a multisectoral framework, is taking its way back into economics. The phenomenon coincides with the recent debate about the macroeconomic Sraffian supermultiplier and generates some new miscommunication by using similar terminology to sectoral multipliers. Thus, the aim of bringing forward the understanding that Keynesian multipliers and Sraffian supermultipliers constitute macroeconomic relations even in multisectoral models is pursued by emphasising the differences between the traditional input–output multipliers and their Keynesian counterparts and by showing the required adaptations for supermultiplier representations. Once aggregate multipliers and supermultipliers are obtained, there is no need for further multisectoral operations and all the differences in impact between economic activities must be attributed to the simple input–output multipliers. Some estimates are presented using data from the World Input-Output Database (WIOD).

Impact of capacity underutilization of milk processing plants on employment multipliers

The investigation into the employment-generating capacity of industries has captured the interest of numerous scholars on a global scale. However, there is a paucity of literature on the impact of the capacity underutilization of dairy processing plants (DPPs) on employment multipliers. This study employed secondary data sourced from the Tanzania Ministry of Livestock and Fisheries’ budget reports for the fiscal year 2022/23. Using the Leontief Input‒Output simulation model, the study establishes the effects of low utilization of milk processing plants on employment generation. The study establishes employment gaps created by capacity underutilization of DPPs along the milk value chain. The fact that the available DPPs operate at just 23.4 % of their total capacity constrains employment opportunities across the entire value chain. Approximately 500,000 Full-Time Equivalent (FTE) minimum wage jobs (i.e., direct, indirect, and induced) are lost annually, highlighting the need for measures to address the challenge of undercapacity utilization of DPPs. Furthermore, the study found significant backwards and forward linkages in the upstream and downstream parts of the dairy value chain. This indicates strong connections and the potential for job creation within the value chain. Thus, ensuring a consistent milk supply in dairy processing plants is crucial to mitigate undercapacity issues in DPPs and to sustain job growth in the milk value chain. Additionally, the study strongly recommends policy measures to boost DPPs’ capacity utilization, foster economic growth, develop the dairy industry, and enhance the overall national economy.

Joan Robinson’s intelligible Marxism and The Accumulation of Capital: a generalisation of the two-sector reproduction scheme

Abstract Joan Robinson sought to make Marx’s economics intelligible to both academic colleagues and followers of Marx, in a twofold approach. First, she adopted Kalecki’s antipathy to the labour theory of value and his insights (following Rosa Luxemburg) into realisation problems in the schemes of reproduction; second, following Sraffa’s reading of Ricardo, she recognised the importance of surplus production as an alternative to neoclassical theory: both culminating in a stripped down two-sector scheme her mature work, The Accumulation of Capital. This scheme is recast here as an input–output framework, providing a generalisation that addresses some of its limitations: the need for an interface with the Kahn/Keynes employment multiplier, the absence of circulating capital inputs, and the lack of a systematic treatment of prices. Furthermore, a somewhat surprising result is the derivation of a core role for Marx’s category of surplus value in the employment multiplier derived from Robinson’s system.

The Estimation of Local Employment Multipliers for Portugal

The Estimation of Local Employment Multipliers for Portugal

Which Crisis Support Fiscal Measures Worked During the Covid-19 Shock in Europe?

AbstractWe build a comprehensive database that categorizes COVID-19 fiscal measures announcements in 12 European Union countries into 7 distinct spending categories. Through our empirical analysis, we investigate the impact of these support packages on the economy. Overall, the fiscal measures played a crucial role in promoting output recovery without significant inflationary pressures. However, we observed substantial variations across different spending categories. Assistance provided to small and medium enterprises and specific sectors proved to be highly effective in stimulating the output while maintaining inflation. Direct pandemic spending and measures aimed at sustaining employment levels generated substantial output and employment multipliers and enhanced business sentiment without leading to inflationary costs. Conversely, universal help had inflationary effects and transfers to households primarily aroused consumer and business sentiment without producing significant economic impacts.

Building back better: Granular energy technologies in green recovery funding programs

Building back better: Granular energy technologies in green recovery funding programs

СОЦІАЛЬНО-ЕКОНОМІЧНІ МУЛЬТИПЛІКАТИВНІ ЕФЕКТИ ВІД РЕАЛІЗАЦІЇ ВЕЛИКИХ ІНФРАСТРУКТУРНИХ ПРОЄКТІВ ДЛЯ УКРАЇНСЬКОЇ ЕКОНОМІКИ

Визначення соціально-економічних пріоритетів розвитку держави має базуватися на об’єктивних і точних висновках щодо сучасного стану соціально-економічного розвитку країни, що підтверджені актуальними розрахунками стосовно визначення соціально-економічних мультиплікативних ефектів для національної економіки від реалізації великих інфраструктурних проєктів. Запропонований методичний підхід базується на визначенні ефектів від реалізації інфраструктурного проєкту через розрахунок мультиплікатора зайнятості й мультиплікаційних ефектів від додаткового приросту Випуску шляхом комплексного аналізу міжгалузевих зв’язків, а також виявлення масштабів впливу інфраструктурного проєкту, що поширюються на інші, безпосередньо залучені в нього види економічної діяльності. Підхід дозволяє розрахувати такі мультиплікативні ефекти: 1) створення робочих місць у економіці в цілому за рахунок 1 млн грн інвестицій у проєкт; 2) створення робочих місць у національній економіці в цілому за рахунок 1 млн грн приросту згенерованого проєктом Випуску; 3) створення додаткових фінансових ресурсів у економіці за рахунок одного залученого в проєкт працівника. Апробація підходу полягає у фактичних розрахунках, здійснених на основі проєктних даних конкретного інфраструктурного проєкту у сфері довгострокового будівництва споруд підприємств електроенергетики. Результати апробації методичного підходу показують суттєві соціально-економічні мультиплікаційні ефекти для економіки України. Наприклад, за період будівництва зазначеного інфраструктурного об’єкта протягом 10 років крім прямої зайнятості безпосередньо в проєкті додатково в економіці України було тимчасово залучено 22 тис. працівників, які опосередковано були задіяні в суміжних галузях економіки, що обслуговували даний проєкт.

Measuring local employment multipliers and informal employment: a stochastic frontier approach

ABSTRACT This paper offers policymakers a novel tool for calculating employment multipliers. A theoretical model incorporating a non-tradeable employment function is combined with a stochastic frontier methodology to estimate an accurate multiplier. The advantage of this model is that it allows a consideration of unobserved informal employment when estimating the multiplier. We find an employment multiplier effect of 1.2 jobs in the non-tradeable sector for one job in the tradeable sector. Also, the greater the number of skilled consumers, the higher the multiplier indices and the lower the level of informal employment. Moreover, specialised sectors requiring skilled workers also present less informal employment. We use provincial data for Spain over the period 1995–2013.

Sugar-sweetened beverages tax and obesity: Simulation of economic impacts from input-output analysis for Brazil

Given the growing interest in taxing sugar-sweetened beverages, we estimated the effects of tax increase of sugary drinks for the Brazilian economy, focusing on the impact on household consumption, production, employment and tax revenues of the government. In order to identify these effects, we considered productive relations of SSB sector by calculating the forward and backward indices and employment multipliers based on the input-output matrix of Brazil. Additionally, we used the Leontief price model incorporating the disaggregation of household consumption vector by income decile in order to identify this effect in a distributional perspective. The results show a tax increase applied to the soft drinks industry generates a slight negative impact on the economy, but it reaches the expected effect: reduction of household consumption for this product. The distributional analysis shows the tax is clearly progressive over the decision, when measured by the compensatory variation.

Economia verde e empregos verdes: uma análise multissetorial por meio da matriz de contabilidade social da Espanha

ABSTRACT During the last decades the green economy has been proposed from different international organizations as an economic model for the 21st century that gravitates around respecting the environment. This paper tries to identify, with criteria of economic efficiency (high economic impact) and social efficiency (high impact on job creation, green jobs), the “potentially green sectors” that can be stimulated by a national strategy to develop a green economy in Spain. For this, we will use the Social Accounting Matrix of Spain 2010, identifying, by means of the normalized absorption and diffusion coefficients and by means of employment multipliers, the key, drivers and with greater capacity for job creation sectors from a group of ten sectors that we have identified as “potentially green sectors”.

The Effects of Government Spending in the Eurozone

Abstract Using a newly assembled rich dataset at the regional level, this paper provides novel empirical evidence on the effects of fiscal policy in the Eurozone. Our baseline estimates reveal a government spending relative output multiplier around 2, an employment multiplier of 1.4, and a cost per job created of approximately €30,000. Moreover, we find that a regional fiscal stimulus leads to a significant increase in private investment, productivity, and durable consumption. The labor share also increases, as do total hours worked driven by changes in the extensive margin (total employment), whereas the intensive margin (hours per worker) barely reacts. Contrary to the common policy narrative of strong positive spillover effects, we estimate only small regional fiscal spillovers. Finally, our findings reveal strong heterogeneities across economic sectors, states of the economy, and member states.

Identifying key sectors in the regional economy: a network analysis approach using input–output data

By applying network analysis techniques to large input–output system, we identify key sectors in the local/regional economy. We overcome the limitations of traditional measures of centrality by using random-walk based measures, as an extension of Blöchl et al. (Phys Rev E 83(4):046127, 2011). These are more appropriate to analyze very dense networks, i.e. those in which most nodes are connected to all other nodes. These measures also allow for the presence of recursive ties (loops), since these are common in economic systems (depending to the level of aggregation, most firms buy from and sell to other firms in the same industrial sector). The centrality measures we present are well suited for capturing sectoral effects missing from the usual output and employment multipliers. We also develop and make available an R implementation for computing the newly developed measures.

Putting labour values to work

Abstract Conventional wisdom has it that Marxian value theory, and labour values themselves, are logically inconsistent, theoretically shaky, and empirically irrelevant. In this paper, we discuss recent research showing that this conclusion is not warranted. While past debates have definitively proved that labour values, or employment multipliers, cannot be used to explain equilibrium prices, this does not mean that a sound, empirically oriented Marxian approach cannot be built which assigns a central role to labour values. To be specific, we argue that they can be used to understand certain fundamental laws of capitalist economies – in particular the relation between profitability, technical progress, and accumulation – and also to construct normatively interesting indices capturing certain inequalities in well-being freedom.

Turizm Sektörünün Türkiye Ekonomisi için Değerlendirilmesi: Girdi – Çıktı Analizi

Tourism sector is one of the important sectors for the countries in terms of increasing employment opportunities, providing income for the economy and raising the foreign currency earnings. Employing 2002 and 2012 input-output tables, the aim of this study is to assess tourism sector of Turkey with the input-output model. According to the results obtained, sectors related to tourism are slightly above the average among all other sectors in terms of employment multipliers, output multipliers and forward - backward linkage effects. The multipliers and linkage effects of these sectors have generally increased in the year of 2012 compared to 2002. Based on Hirschman categories, although the importance of sectors related to tourism generally increased compared to the year of 2002, these sectors are not in the “key sector” category. Consequently, policies increasing the linkages of the tourism sector with the overall economy should be implemented.