Abstract
Economic development involves creating new jobs while retaining existing jobs in a defined region. The focus in this paper is to propose and illustrate a method for identifying sectors with net positive employment impacts on the relevant jurisdiction using input-output (I/O) analysis. This approach is in contrast to the traditional purpose of I/O models, which is to determine the total economic impact of given changes in final demand in specific industries. The emphasis on employment in this paper explicitly addresses the potential for new employment to replace (crowd out) existing employment. This paper provides a method for selecting industries that minimize crowding out. We illustrate the use of this method with prison industry choice aggregated at the local, state and national levels. We find that the net employment effect of creating a new job is an empirical question dependent upon the aggregation level chosen and the region's economy.
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