Difference between revisions of "Employment Multiplier"
Wiki admin (talk | contribs) |
Wiki admin (talk | contribs) (→Formula) |
||
| (One intermediate revision by the same user not shown) | |||
| Line 1: | Line 1: | ||
== Definition == | == Definition == | ||
'''Employment Multiplier''' is a concept used in [[Multiplier Analysis]] and measures the ratio of the total economy-wide indirect/induced employment of all industries in the economy to satisfy a one-unit increase in the company’s total employment. | '''Employment Multiplier''' is a concept used in [[Multiplier Analysis]] and measures the ratio of the total economy-wide indirect/induced employment of all industries in the economy to satisfy a one-unit increase in the company’s total employment. | ||
| + | |||
| + | For each industry, the employment multipliers represent jobs created per unit of currency | ||
| + | of additional final use. | ||
== Formula == | == Formula == | ||
| + | |||
| + | :<math> | ||
| + | Z = E (I - A)^{-1} | ||
| + | </math> | ||
| + | |||
The employment multiplier for sector j indicates the total change in employment from a unit change in direct employment in sector j. The numerator is the sum of interdependence coefficients for sector j weighted by average employment per unit of output in each sector, or the direct plus indirect effects of a unit change in final demand. The denominator is average employment per unit of output in sector j, or the direct effect of a unit change in final demand. | The employment multiplier for sector j indicates the total change in employment from a unit change in direct employment in sector j. The numerator is the sum of interdependence coefficients for sector j weighted by average employment per unit of output in each sector, or the direct plus indirect effects of a unit change in final demand. The denominator is average employment per unit of output in sector j, or the direct effect of a unit change in final demand. | ||
Latest revision as of 17:22, 16 November 2023
Definition
Employment Multiplier is a concept used in Multiplier Analysis and measures the ratio of the total economy-wide indirect/induced employment of all industries in the economy to satisfy a one-unit increase in the company’s total employment.
For each industry, the employment multipliers represent jobs created per unit of currency of additional final use.
Formula
The employment multiplier for sector j indicates the total change in employment from a unit change in direct employment in sector j. The numerator is the sum of interdependence coefficients for sector j weighted by average employment per unit of output in each sector, or the direct plus indirect effects of a unit change in final demand. The denominator is average employment per unit of output in sector j, or the direct effect of a unit change in final demand.
