Including Jobs in Benefit-Cost Analysis

Timothy Bartik ()

Annual Review of Resource Economics, 2012, vol. 4, issue 1, 55-73

Abstract: Public policies may affect employment by directly creating jobs or facilitating job creation. In labor markets with high unemployment, such employment changes may have significant net efficiency benefits, which should be included in benefit-cost analyses. The research literature offers diverse recommendations on measuring employment benefits. Many of the recommendations rely on arbitrary assumptions. The resulting employment benefit estimates vary widely. This article reviews this literature and offers recommendations on how to better measure employment benefits using estimable parameters. Guidance is provided on measuring policy-induced labor demand, estimating the demand shock's impact on labor market outcomes, and translating labor market impacts into efficiency benefits. Two measures are proposed for efficiency benefits, one relying on adjusted reservation wage gains and the other relying on adjusted earnings gains.

Keywords: reservation wages; unemployment; occupational upgrading (search for similar items in EconPapers)
JEL-codes: H43 J68 Q28 (search for similar items in EconPapers)
Date: 2012
References: Add references at CitEc
Citations: View citations in EconPapers (15)

Downloads: (external link)
http://www.annualreviews.org/doi/abs/10.1146/annurev-resource-110811-114520 (application/pdf)
Full text downloads are only available to subscribers. Visit the abstract page for more information.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:anr:reseco:v:4:y:2012:p:55-73

Ordering information: This journal article can be ordered from
http://www.annualreviews.org/action/ecommerce

Access Statistics for this article

More articles in Annual Review of Resource Economics from Annual Reviews Annual Reviews 4139 El Camino Way Palo Alto, CA 94306, USA.
Bibliographic data for series maintained by http://www.annualreviews.org ().