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Identifying Industries for Employment Development Using Input-Output Modeling: The Case of Prison Industry Employment

Author

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  • Charles E. Scott
  • Nancy A. Williams
  • Frederick W. Derrick

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.

Suggested Citation

  • Charles E. Scott & Nancy A. Williams & Frederick W. Derrick, 2010. "Identifying Industries for Employment Development Using Input-Output Modeling: The Case of Prison Industry Employment," The American Economist, Sage Publications, vol. 55(2), pages 142-153, November.
    • Handle: RePEc:sae:amerec:v:55:y:2010:i:2:p:142-153
    DOI: 10.1177/056943451005500215
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    References listed on IDEAS

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    1. repec:kap:iaecre:v:12:y:2006:i:4:p:540-550 is not listed on IDEAS
    2. Charles Scott & Frederick Derrick, 2006. "Prison Labor: The Local Effects of Ohio Prison Industries," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 12(4), pages 540-550, November.
    3. Frederic Pryor, 2005. "Industries Behind Bars: An Economic Perspective on the Production of Goods and Services by U.S. Prison Industries," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 27(1), pages 1-16, August.
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