14-i 

CHAPTER 14. EMPLOYMENT IMPACT ANALYSIS 

TABLE OF CONTENTS 

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

14.2 METHODOLOGY ........................................................................................................ 14-1 

14.3 RESULTS ...................................................................................................................... 14-2 

14.3.2 Net National Employment Impact Summary............................................... 14-5 

LIST OF TABLES 

Table 14.3.1 Polyphase Small Electric Motors: Net National Change in Employment ......... 14-7 

Table 14.3.2 Capacitor-Start Small Electric Motors: Net National Change in 

Employment....................................................................................................... 14-7 

LIST OF FIGURES 

Figure 14.3.1 Polyphase Small Electric Motors: Employment Impact of Increased 

Equipment Costs................................................................................................ 14-3 

Figure 14.3.2 Capacitor-Start Small Electric Motors: Employment Impact of Increased 

Equipment Costs................................................................................................ 14-3 

Figure 14.3.3 Polyphase Small Electric Motors: Employment Impact of Energy Savings ..... 14-4 

Figure 14.3.4 Capacitor-Start Small Electric Motors: Employment Impact of Energy 

Savings............................................................................................................... 14-5 

Figure 14.3.5 Polyphase Small Electric Motors: Net National Change in Employment ......... 14-6 

Figure 14.3.6 Capacitor-Start Small Electric Motors: Net National Change in 

Employment....................................................................................................... 14-6 

EERE-2007-BT-STD-0007 COMMENT 33
 14-1 

CHAPTER 14. EMPLOYMENT IMPACT ANALYSIS 

14.1 INTRODUCTION 

 DOE’s employment impact analysis is designed to estimate indirect national job creation 

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

expenditures for purchasing and operating small electric motors. 

 DOE expects small electric motor 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 general purpose small electric motors, including the retail price plus sales tax. 

Using an input/output econometric model of the U.S. economy, this analysis estimated the yearto-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 of small electric 

motors in the manufacturer impact analysis (see chapter 12). 

14.2 METHODOLOGY 

 The Department based its analysis on an input/output 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, ImSET1

 (Impact of Sector Energy Technologies) as a successor to ImBuild2, a specialpurpose version of the IMPLAN3

 national input/output model. ImSET estimates the employment 

and income effects of building energy technologies. In comparison 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 input/output 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. Different 

sectors have different levels of labor intensity and so 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 188-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 input-output 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. 

EERE-2007-BT-STD-0007 COMMENT 33
 14-2 

 Energy-efficiency technology primarily affects the U.S. economy along three spending 

pathways. First, general investment funds are diverted to sectors that manufacture, install, and 

maintain energy-efficient appliances. The increased cost of appliances leads to higher 

employment in the appliance manufacturing sectors and lower employment in other economic 

sectors. Second, commercial firm and residential spending are redirected from utilities toward 

firms that supply production inputs. Third, electric utility sector investment funds are released 

for use in other sectors of the economy. When consumers use less energy, electric utilities 

experience relative reductions in demand which leads to reductions in utility sector investment 

and employment. 

14.3 RESULTS 

 The results in this section refer to impacts of small electric motor standards relative to the 

base case for each appliance. DOE disaggregated the impact of small electric motor standards on 

employment into two component effects: increased capital investment costs and decreased 

energy costs. DOE does not project that repair or maintenance costs will vary with motor 

efficiency. Therefore, these costs are unchanged by the proposed standard, and have no 

employment impacts. These component effects and a summary impact are presented for 

polyphase and capacitor-start motors at each trial standard level. 

 In calculating employment impacts of capacitor-start TSLs, DOE used its CSCR/CSIR 

market share model with a ten-year market share shift time which models a market transition 

from current CSIR market share in 2015 to the final modeled market share in 2025, and with a 

zero-year market share shift time (market share shift complete by 2015). The figures presented in 

this section correspond only to the ten-year market share shift time, but Table 14.3.2 shows the 

ranges of these employment impact estimates derived from the two market share models. The 

employment impacts predicted by the two models differ most during the 2015 to 2025 time 

period and for TSLs with large market share changes, as expected. 

 Figures 14.4.1 and 14.4.2 summarize the employment impacts of the increased 

investment and spending on higher-efficiency equipment. Equipment manufacturing is relatively 

capital-intensive compared to other sectors of the economy, but the increased costs of efficiency 

add to the income of distributors and retail businesses, which are (on average) more laborintensive than other sectors. Therefore, the department projects that the capital expenditures on 

more expensive motors will result in a net increase of jobs. 

EERE-2007-BT-STD-0007 COMMENT 33
0

1

2

3

4

5

6

2015 2020 2025 2030 2035 2040 2045

Year

Net Jobs (1000s)

TSL 1

TSL 2

TSL 3

TSL 4

TSL 5

TSL 6

TSL 7

Figure 14.3.1 Polyphase Small Electric Motors: Employment Impact of Increased 

Equipment Costs 

0

2

4

6

8

10

12

14

2015 2020 2025 2030 2035 2040 2045

Year

Net Jobs (1000s)

TSL 1

TSL 2

TSL 3

TSL 4

TSL 5

TSL 6

TSL 7

TSL 8

Figure 14.3.2 Capacitor-Start Small Electric Motors: Employment Impact of 

Increased Equipment Costs 

 14-3 

EERE-2007-BT-STD-0007 COMMENT 33
 Figures 14.4.3 and 14.4.4 show the employment impact of redirected spending made 

possible by equipment energy savings. For all products, the employment impact is strongly 

positive. 

0

0.5

1

1.5

2

2.5

3

2015 2020 2025 2030 2035 2040 2045

Year

Net Jobs (1000s)

TSL 1

TSL 2

TSL 3

TSL 4

TSL 5

TSL 6

TSL 7

Figure 14.3.3 Polyphase Small Electric Motors: Employment Impact of Energy 

Savings 

 14-4 

EERE-2007-BT-STD-0007 COMMENT 33
0

2

4

6

8

10

12

14

16

2015 2020 2025 2030 2035 2040 2045

Year

Net Jobs (1000s)

TSL 1

TSL 2

TSL 3

TSL 4

TSL 5

TSL 6

TSL 7

TSL 8

Figure 14.3.4 Capacitor-Start Small Electric Motors: Employment Impact of 

Energy Savings 

14.3.2 Net National Employment Impact Summary 

 Figures 14.3.5 and 14.3.6 show the estimated net national employment impacts of the 

polyphase and capacitor-start small electric motor trial standard levels. Figure 14.3.6 corresponds 

to the case in which the CSIR/CSCR market shares adjust over the period from 2015 to 2025. 

For any given year, these figures show the net change in the number of jobs in the economy 

relative to if there were no change in standards (and thus no resulting change in spending and 

cash flow patterns throughout the economy). Tables 14.3.1 and 14.3.2 show the net national 

employment impact in specific years. Table 14.3.2 shows this impact as a range between the 

employment impacts of a standard if the CSIR/CSCR market share takes ten years to adjust to 

the standard and the impact if the market adjusts by 2015, the start of the analysis period. 

 14-5 

EERE-2007-BT-STD-0007 COMMENT 33
0

1

2

3

4

5

6

7

8

9

2015 2020 2025 2030 2035 2040 2045

Year

Net Jobs (1000s)

TSL 1

TSL 2

TSL 3

TSL 4

TSL 5

TSL 6

TSL 7

Figure 14.3.5 Polyphase Small Electric Motors: Net National Change in 

Employment 

0.00

5.00

10.00

15.00

20.00

25.00

2015 2020 2025 2030 2035 2040 2045

Year

Net Jobs (1000s)

TSL 1

TSL 2

TSL 3

TSL 4

TSL 5

TSL 6

TSL 7

TSL 8

Figure 14.3.6 Capacitor-Start Small Electric Motors: Net National Change in 

Employment 

 14-6 

EERE-2007-BT-STD-0007 COMMENT 33
 14-7 

Table 14.3.1 Polyphase Small Electric Motors: Net National Change in Employment 

Trial Standard 

Level 

2015 

(thousands) 

2025 

(thousands)

2035 

(thousands)

2045 

(thousands) 

1 0.06 0.20 0.24 0.29 

2 0.10 0.44 0.54 0.64 

3 0.18 0.85 1.03 1.22 

4 0.22 0.98 1.19 1.41 

5 0.65 1.95 2.33 2.74 

6 0.89 2.35 2.78 3.26 

7 3.87 6.09 6.95 7.98 

Table 14.3.2 Capacitor-Start Small Electric Motors: Net National Change in Employment 

Trial Standard 

Level 

2015 

(thousands) 

2025 

(thousands) 

2035 

(thousands) 

2045 

(thousands) 

1 0.99 3.49 5.13 – 5.21 6.63 – 6.74 

2 1.00 3.54 5.20 – 5.29 6.73 – 6.85 

3 1.41 – 1.42 4.51 – 4.53 6.59 – 6.68 8.50 – 8.64 

4 2.24 – 2.27 5.88 – 5.94 8.41 – 8.55 10.8 – 10.97 

5 2.18 – 2.25 5.83 – 5.89 8.37 – 8.50 10.75 – 10.92 

6 10.02 – 10.05 15.25 – 15.38 19.2 – 19.64 23.87 – 24.42 

7 1.66 – 8.41 6.48 – 9.48 9.52 – 9.78 12.36 – 12.69 

8 3.27 – 8.66 9.16 – 10.92 12.98 – 13.28 16.74 – 17.07 

EERE-2007-BT-STD-0007 COMMENT 33
 14-8 

 

REFERENCES 

1

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

Pacific Northwest National Laboratory. July 2005. 

2

 Scott, M. J., D. J. Hostick, and D. B. Belzer, ImBuild: Impact of Building Energy Efficiency 

Programs, April, 1998. Pacific Northwest National Laboratory. Richland, WA. Report No. 

PNNL-11884. Prepared for the U.S. Department of Energy under Contract DE-AC06-76RLO 

1830. 

3

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

Guide, 1997. Stillwater, MN.

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