15-i 

CHAPTER 15. EMPLOYMENT IMPACT ANALYSIS

TABLE OF CONTENTS

15.1 INTRODUCTION ............................................................................................................ 15-1

15.2 ASSUMPTIONS ............................................................................................................... 15-1

15.3 METHODOLOGY ........................................................................................................... 15-1

15.4 RESULTS ......................................................................................................................... 15-2

REFERENCES .......................................................................................................................... 15-3

LIST OF TABLES

Table 15.4.1 Net National Change in Employment Under Ballast TSLs .................................. 15-2
15-1 

CHAPTER 15. EMPLOYMENT IMPACT ANALYSIS

15.1 INTRODUCTION

The employment impact analysis is intended to estimate national job creation or job 

elimination resulting from proposed standards due to reallocation of associated commercial 

expenditures for purchasing and operating fluorescent lamp ballasts. The U.S. Department of 

Energy (DOE) conducted this analysis as part of the notice of proposed rulemaking (NOPR). 

DOE estimated the impacts of standards on employment for product manufacturers, 

relevant service industries, energy suppliers, and the economy in general. Both indirect and 

direct employment impacts were covered. Direct employment impacts would result if energy 

conservation standards led to a change in the number of employees at manufacturing plants and 

related supply and service firms. Direct impact estimates are addressed in the manufacturer 

impact analysis (chapter 13 of the NOPR technical support document [TSD]). Indirect 

employment impacts affect the national economy in areas other than in the regulated 

manufacturing sector. Indirect impacts may result both from expenditures shifting among goods 

(substitution effect) and changes in income that lead to an adjustment in overall expenditure 

levels (income effect). DOE defines indirect employment impacts from energy conservation

standards as net jobs eliminated or created in the general economy as a result of increased 

spending driven by the increased prices for regulated products and reduced spending on energy.

15.2 ASSUMPTIONS

DOE expects energy conservation standards to decrease energy consumption and, 

therefore, to reduce energy expenditures. The savings in energy expenditures may be spent on 

new investment or not at all (i.e., they may remain “saved”). The standards may increase the 

purchase price of ballasts, including the retail price plus sales tax, and increase installation costs.

Using an input/output (I-O) econometric model of the U.S. economy, this analysis 

estimated the year-to-year effect of these expenditure impacts on net economic output and 

employment. DOE intends this analysis to quantify the indirect employment impacts of these 

expenditure changes. It evaluated direct employment impacts at manufacturers’ facilities in the 

manufacturer impact analysis (see NOPR TSD chapter 13).

15.3 METHODOLOGY

DOE based its analysis on an I-O model of the U.S. economy that estimates the effects of 

standards on major sectors of the economy related to buildings and the net impact of standards 

on jobs. The Pacific Northwest National Laboratory developed the model using ImSET 3.1.11

(Impact of Sector Energy Technologies) to estimate the employment and income effects of 

building energy technologies. Compared with simple economic multiplier approaches, ImSET 

allows for more complete and automated analysis of the economic impacts of energy efficiency 

investments in buildings. 

In an I-O model, the level of employment in an economy is determined by the 

relationship of different sectors of the economy and the spending flows among them. Because 
15-2 

different sectors have different levels of labor intensity, changes in the level of spending (e.g., 

due to the effects of an efficiency standard) in one sector of the economy will affect flows in 

other sectors, which affects the overall level of employment.

ImSET uses a 187-sector model of the national economy to predict the economic effects 

of residential and commercial buildings technologies. ImSET collects estimates of initial 

investments, energy savings, and economic activity associated with spending the savings 

resulting from standards (e.g., changes in final demand in personal consumption, business 

investment and spending, and government spending). It provides overall estimates of the change 

in national output for each I-O sector. The model applies estimates of employment and wage 

income per dollar of economic output for each sector and calculates impacts on national 

employment and wage income.

The following is an example of how the employment impact analysis might track impacts 

from a standard for fluorescent lamp ballasts. Depending on the design options considered, one 

possible outcome is that the standards for these ballasts would reduce energy expenditures and 

increase equipment prices in the commercial sector. These expenditure changes may reduce 

commercial and energy sector employment. At the same time, the standard may increase 

investment in the commercial sector and employment in other sectors. DOE designed the 

employment impact analysis to estimate the annual net national employment impact of these 

types of expenditure flows. 

15.4 RESULTS

Table 15.4.1 shows the net national employment impact in 2020 and 2043, the final year 

of the analysis period, for ballasts. Any initial decreases in net employment would be caused by 

the dominance of capital costs in early years, while the impacts of operating cost savings from 

reduced energy use build up slowly over time, resulting in a net positive impact on employment 

in later years.

Table 15.4.1 Net National Change in Employment Under Ballast TSLs 

Analysis 

Period 

Year

Trial 

Standard 

Level

Net National Change in Jobs

thousands

Existing Technologies, 

Shift

Emerging Technologies, 

Roll-up

2020 1 12.64 3.67

2 2.89 2.59

3 3.63 3.31

2043 1 123.75 31.79

2 63.21 37.07

3 89.47 51.06
15-3 

REFERENCES

1. Roop, J. M., M. J. Scott, and R. W. Schultz. ImSET 3.1: Impact of Sector Energy 

Technologies. 2008. Pacific Northwest National Laboratory: Richland, WA. Report No. 

PNNL-18412.