Abstract
The consideration of employment effects and so-called 'hidden employment benefits' is one of the most confused and contentious issues in benefit-cost analysis and applied welfare economics generally. New investments create new employment opportunities, and often advocates for specific investments cite these employment opportunities as alleged benefits associated with the project. Indeed, from the local perspective, such employment opportunities may appear to be beneficial because they appear to come for free. If there is unemployment in the local area, then new investments create valuable employment opportunities for those in the local community. Even if there is full employment in the local area then new investments create incentives for immigrant from other locations that may have pecuniary benefits locally through increased property values, business revenues, etc. The focus in this study is on net economic benefits from a broad national perspective. From this perspective, many of the alleged employment benefits at the local level are offset by lost benefits at other locales, and do not count as benefits according to economic theory. This paper outlines a methodology for testing this rebuttable presumption with empirical data pertaining to labor markets that would be affected by a specific new investment. The theoretical question that
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Citation Formats
Burtraw, D.
The measurement of employment benefits.
IAEA: N. p.,
1994.
Web.
Burtraw, D.
The measurement of employment benefits.
IAEA.
Burtraw, D.
1994.
"The measurement of employment benefits."
IAEA.
@misc{etde_20478196,
title = {The measurement of employment benefits}
author = {Burtraw, D}
abstractNote = {The consideration of employment effects and so-called 'hidden employment benefits' is one of the most confused and contentious issues in benefit-cost analysis and applied welfare economics generally. New investments create new employment opportunities, and often advocates for specific investments cite these employment opportunities as alleged benefits associated with the project. Indeed, from the local perspective, such employment opportunities may appear to be beneficial because they appear to come for free. If there is unemployment in the local area, then new investments create valuable employment opportunities for those in the local community. Even if there is full employment in the local area then new investments create incentives for immigrant from other locations that may have pecuniary benefits locally through increased property values, business revenues, etc. The focus in this study is on net economic benefits from a broad national perspective. From this perspective, many of the alleged employment benefits at the local level are offset by lost benefits at other locales, and do not count as benefits according to economic theory. This paper outlines a methodology for testing this rebuttable presumption with empirical data pertaining to labor markets that would be affected by a specific new investment. The theoretical question that is relevant is whether the social opportunity cost of new employment is less than the market wage. This would be the case, for example, if one expects unemployment or underemployment to persist in a specific region of the economy or occupational category affected by the new investment. In this case, new employment opportunities produce a net increase in social wealth rather than just a transfer of income.}
place = {IAEA}
year = {1994}
month = {Jul}
}
title = {The measurement of employment benefits}
author = {Burtraw, D}
abstractNote = {The consideration of employment effects and so-called 'hidden employment benefits' is one of the most confused and contentious issues in benefit-cost analysis and applied welfare economics generally. New investments create new employment opportunities, and often advocates for specific investments cite these employment opportunities as alleged benefits associated with the project. Indeed, from the local perspective, such employment opportunities may appear to be beneficial because they appear to come for free. If there is unemployment in the local area, then new investments create valuable employment opportunities for those in the local community. Even if there is full employment in the local area then new investments create incentives for immigrant from other locations that may have pecuniary benefits locally through increased property values, business revenues, etc. The focus in this study is on net economic benefits from a broad national perspective. From this perspective, many of the alleged employment benefits at the local level are offset by lost benefits at other locales, and do not count as benefits according to economic theory. This paper outlines a methodology for testing this rebuttable presumption with empirical data pertaining to labor markets that would be affected by a specific new investment. The theoretical question that is relevant is whether the social opportunity cost of new employment is less than the market wage. This would be the case, for example, if one expects unemployment or underemployment to persist in a specific region of the economy or occupational category affected by the new investment. In this case, new employment opportunities produce a net increase in social wealth rather than just a transfer of income.}
place = {IAEA}
year = {1994}
month = {Jul}
}