13-i 

CHAPTER 13. EMPLOYMENT IMPACT ANALYSIS 

TABLE OF CONTENTS

13.1 INTRODUCTION ......................................................................................................... 13-1

13.2 ASSUMPTIONS ............................................................................................................ 13-1

13.3 METHODOLOGY ........................................................................................................ 13-1

13.4 RESULTS ...................................................................................................................... 13-2

LIST OF TABLES

Table 13.4.1 Clothes Dryer Net National Change in Employment (Thousand jobs) ............. 13-6

Table 13.4.2 Room Air Conditioner Net National Change in Employment (Thousand 

jobs).................................................................................................................... 13-7

LIST OF FIGURES

Figure 13.4.1 Clothes Dryer Employment Impact of Increased Equipment Cost .................... 13-3

Figure 13.4.2 Room Air Conditioner Employment Impact of Increased Equipment Cost ...... 13-3

Figure 13.4.3 Clothes Dryer Employment Impact of Operating Cost Savings ........................ 13-4

Figure 13.4.4 Room Air Conditioner Employment Impact of Operating Cost Savings .......... 13-4

Figure 13.4.5 Clothes Dryer Net National Change in Employment ........................................ 13-5

Figure 13.4.6 Room Air Conditioner Net National Change in Employment ........................... 13-6
13-1 

CHAPTER 13. EMPLOYMENT IMPACT ANALYSIS

13.1 INTRODUCTION

 DOE conducted an employment impact analysis for the NOPR and Final Rule. 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 residential clothes dryers and room air conditioners. 

13.2 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 appliances, including the retail price plus sales tax, and increase installation 

costs. 

 Using an input/output 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 chapter 12).

13.3 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, ImSET 3.1.11

 (Impact of Sector Energy Technologies) as a successor to ImBuild2, a 

special-purpose 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 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 input-output sector. The model applies estimates of employment and 
13-2 

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

employment and wage income.

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. 

13.4 RESULTS

The results in this section refer to impacts of residential clothes dryer and room air 

conditioner standards relative to the base case for each appliance. DOE disaggregated the impact 

of standards on employment into three component effects: increased capital investment costs, 

decreased energy costs, and changes in operations and maintenance costs. These component 

effects and a summary impact are presented for residential clothes dryers and room air 

conditioners. No significant change in non-energy operations and maintenance cost is anticipated 

for room air conditioners or residential clothes dryers. 

 Figures 13.4.1-13.4.2 summarize the employment impacts of the increased investment 

and spending on higher-efficiency equipment. Clothes dryer manufacturing is relatively more 

capital intensive compared to other sectors of the economy, on average, so the net result is a loss 

of employment. The air conditioning, refrigeration and forced air heating manufacturing sector, 

which includes room air conditioners, is somewhat less capital intensive than other sectors of the 

economy, so the net result is a small increase in employment.
13-3 

Figure 13.4.1 Clothes Dryer Employment Impact of Increased Equipment Cost 

Figure 13.4.2 Room Air Conditioner Employment Impact of Increased 

Equipment Cost

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-8

-7

-6

-5

-4

-3

-2

-1

0

2014 2019 2024 2029 2034 2039

Incremental Jobs (1000)

Year

TSL 1

TSL 2

TSL 3

TSL 4

TSL 5

TSL 6

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1.0

2014 2019 2024 2029 2034 2039

Incremental Jobs (1000)

Year

TSL 1

TSL 2

TSL 3

TSL 4

TSL 5

TSL 6
13-4 

Figures 13.4.3-13.4.4 show the employment impact of redirected spending made possible 

by appliance operating cost savings. In this case, the employment impact is strongly positive. 

Figure 13.4.3 Clothes Dryer Employment Impact of Operating Cost Savings 

Figure 13.4.4 Room Air Conditioner Employment Impact of Operating Cost 

Savings 

0

2

4

6

8

10

12

14

16

18

2014 2019 2024 2029 2034 2039

Incremental Jobs (1000)

Year

TSL 1

TSL 2

TSL 3

TSL 4

TSL 5

TSL 6

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

2014 2019 2024 2029 2034 2039

Incremental Jobs (1000)

Year

TSL 1

TSL 2

TSL 3

TSL 4

TSL 5

TSL 6
13-5 

Figures 13.4.5-13.4.6 show the estimated net national employment impacts of the clothes 

dryer and room air conditioner product trial standard levels. 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). These figures show the combined effects of equipment cost, operations and 

maintenance cost, and energy use changes due to standards. 

Figure 13.4.5 Clothes Dryer Net National Change in Employment 

-8

-6

-4

-2

0

2

4

6

8

10

2014 2019 2024 2029 2034 2039

Incremental Jobs (1000)

Year

TSL 1

TSL 2

TSL 3

TSL 4

TSL 5

TSL 6
13-6 

Figure 13.4.6 Room Air Conditioner Net National Change in Employment 

Tables 13.4.1-13.4.2 show the net national employment impact in specific years for each 

product, as well as the average annual employment impact over the 2014-2043 time period. For 

clothes dryers, the initial decrease in net employment is 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 13.4.1 Clothes Dryer Net National Change in Employment (Thousand jobs)

Trial Standard 

Level 2014 2020 2030 2043 Average 2014-2043

1 0.00 0.00 0.01 0.01 0.01

2 0.00 0.00 0.01 0.01 0.01

3 -0.14 0.41 1.18 1.82 0.99

4 -0.19 0.36 1.13 1.75 0.93

5 -3.50 -1.37 1.71 4.25 0.95

6 -7.89 -3.16 3.69 9.30 1.99

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

4.50

2014 2019 2024 2029 2034 2039

Incremental Jobs (1000)

Year

TSL 1

TSL 2

TSL 3

TSL 4

TSL 5

TSL 6
13-7 

Table 13.4.2 Room Air Conditioner Net National Change in Employment (Thousand jobs)

Trial Standard 

Level 2014 2020 2030 2043 Average 2014-2043

1 0.23 0.90 1.11 0.74 0.90

2 0.22 0.88 1.09 0.73 0.88

3 0.25 0.97 1.11 0.74 0.92

4 0.37 1.34 1.59 1.16 1.32

5 0.61 2.04 2.51 1.94 2.11

6 1.38 3.22 3.84 3.07 3.31
13-8 

REFERENCES

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

Technologies, 2009. Pacific Northwest National Laboratory. Richland, WA. Report No. 

PNNL- 18412. Also, Scott, M.J. Note on Impact of Sector Energy Technologies (ImSET) 

Model Version 3.1, July, 2010 Pacific Northwest National Laboratory. 

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.