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CHAPTER 14. EMPLOYMENT IMPACT ANALYSIS

TABLE OF CONTENTS

14.1 INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14-1

14.2 ASSUMPTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14-1

14.3 METHODOLOGY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14-1
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CHAPTER 14. EMPLOYMENT IMPACT ANALYSIS

14.1 INTRODUCTION

The Department intends the net national employment impact analysis to estimate national

job creation or elimination resulting from possible standards, due to reallocation of the

associated commercial expenditures for purchasing and operating equipment. The Department

will estimate national impacts on major sectors of the U.S. economy, using publicly available

data and incorporating different energy price scenarios to be conducted as part of the analysis for

the Notice of Proposed Rulemaking (NOPR) analysis. The Department will make all methods

and documentation available for review.

14.2 ASSUMPTIONS

The Department expects new commercial equipment standards to decrease energy

consumption, and therefore to reduce commercial expenditures for energy. The savings in

energy expenditures may be spent on new commercial investment and other items. The

standards may increase the purchase price of commercial equipment, including the retail price

plus sales tax, and increase installation costs. 

Using an input/output model of the U.S. economy, this analysis seeks to estimate the

year-to-year effect of these expenditure impacts on net economic output and employment. A

simple model might involve reduced expenditures for energy and reallocation of that money

toward other sectors in the economy. The Department intends this analysis to quantify the

indirect employment impacts of these expenditure changes. It will evaluate direct employment

impacts in the manufacturer impact analysis.

14.3 METHODOLOGY

The Department developed a spreadsheet model of the U.S. economy (IMBUILD)

focusing on 35 sectors most relevant to industrial, commercial, and residential building energy

use.1

 IMBUILD is a special-purpose version of the Impact Analysis for Planning (IMPLAN)

national input-output model, which specifically estimates the employment and income effects of

building energy technologies.2 The IMPLAN model was developed originally by the U.S. Forest

Service, in cooperation with the Federal Emergency Management Agency (FEMA) and the

Bureau of Land Management (BLM), to assist the Forest Service in land and resource

management planning. The IMBUILD software includes a PC-based input-output model with

structural coefficients to characterize economic flows among the 35 sectors. The Department

may use the IMBUILD model to estimate changes in employment, industry output, and wage

income in the overall U.S. economy resulting from changes in expenditures in the various sectors

of the economy. 
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For example, commercial air-conditioning standards may reduce energy expenditures and

increase equipment prices in the commercial sector. These expenditure changes are likely to

reduce commercial and energy sector employment. At the same time, equipment standards may

increase commercial sector investment, and increase employment in other sectors of the

economy. The Department designed the net national employment impact analysis to estimate the

year-to-year net employment effect of these different expenditure flows.
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1. Pacific Northwest National Laboratory, ImBuild: Impact of Building Energy Efficiency

Programs, 1998. Richland, WA. Prepared for the U.S. Department of Energy under

Contract DE-AC06-76RLO 1830.

2. Minnesota IMPLAN Group, Inc., IMPLAN Professional: User’s Guide, Analysis Guide,

Data Guide, 1997. Stillwater, MN. 

REFERENCES