CHAPTER 15. NET NATIONAL EMPLOYMENT IMPACT ANALYSIS 

TABLE OF CONTENTS
 

15.1 ASSUMPTIONS............................................................................................................... 15-2 

15.2 METHODOLOGY ........................................................................................................... 15-2 

15.3 RESULTS ......................................................................................................................... 15-3 

REFERENCES .......................................................................................................................... 15-5 

LIST OF TABLES 

Table 15.3.1 Net National Change in Jobs for Class A Beverage Vending Machines ........... 15-3 

Table 15.3.2 Net National Change in Jobs for Class B Beverage Vending Machines ........... 15-4 

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CHAPTER 15. NET NATIONAL EMPLOYMENT IMPACT ANALYSIS 

Employment impact is one of the factors that the U.S. Department of Energy (DOE) 

considers in selecting a standard for refrigerated beverage vending machines. Employment 

impacts include direct and indirect impacts. Direct employment impacts are any changes in the 

number of employees for beverage vending machine manufacturers, their suppliers, and related 

service firms. Indirect impacts are those changes of employment in the larger economy that 

occur due to the shift in expenditures and capital investment that is caused by the purchase and 

operation of more efficient beverage vending machine equipment. The manufacturer impact 

analysis in this rulemaking addresses only the employment impacts on manufacturers of 

beverage vending machines (i.e., the direct employment impacts). Chapter 13, Manufacturer 

Impact Analysis, of the technical support document (TSD) describes other manufacturer impacts, 

primarily indirect employment impacts. 

15.1 ASSUMPTIONS 

DOE expects the refrigerated beverage vending machines energy conservation standards 

to decrease the national energy consumption and therefore reduce energy expenditures. The 

savings in energy expenditures may be used on new investment or not at all (i.e., they may 

remain “saved”). The energy conservation standards may increase the purchase price (i.e., 

equipment price plus sales tax) and installation costs of beverage vending machines. 

Using an input-output model of the U.S. economy, this analysis estimated the year-toyear effect of these expenditure impacts on net economic output and employment. This analysis 

quantifies the indirect employment impacts of reduced expenditures for energy and reallocation 

of that money toward other sectors of the economy. 

15.2 METHODOLOGY 

DOE defines the net national employment impacts resulting from energy conservation 

standards for beverage vending machines as the net national change in jobs in the general 

economy. The key factors affecting the outcome of net change in jobs are: (1) increased spending 

on the purchase and installation of beverage vending machine equipment meeting the standards; 

(2) reduced customer spending on electricity; (3) reduced spending on new investment or 

capacity by energy companies; and (4) the associated indirect effects of the above. 

DOE based its analysis on the Impact of Sector Energy Technologies (ImSET) model 

developed by Pacific Northwest National Laboratory for DOE’s Office of Energy Efficiency and 

Renewable Energy.1

 ImSET is a personal computer-based, economic analysis model that 

estimates the effects of standards on major sectors of the U.S. economy related to buildings and 

the net impact of standards on jobs. ImSET’s input/output structure is based on the 2002 

Benchmark U.S. table aggregated to 187 sectors to estimate the employment and income effects 

of building energy technologies.2

 Compared with simple economic multiplier approaches, 

ImSET allows for more complete and automated analysis of the economic impacts of energyefficiency 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. The various 

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

effects of an amended energy conservation standard) in one sector of the economy will affect 

spending in other sectors, which in turn will affect the overall level of employment. 

ImSET collects estimates of initial investments, energy savings, and economic activity 

associated with spending the savings resulting from amended 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. Then, 

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. 

ImSET calculates the total effect of standards on employment, including job creation or 

deletion, in the manufacturing sector. As described above, DOE analyzed the direct employment 

impacts (i.e., those that would occur at the manufacturing plants of beverage vending machine 

equipment) in the manufacturer impact analysis (chapter 13). 

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

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

maintain energy efficient technologies. The increased cost of technology leads to higher 

employment in the manufacturing sector, including beverage vending machines and lower 

employment in other economic sectors. Second, commercial firm spending is redirected from 

utilities toward firms that supply commercial production inputs. 

15.3 RESULTS 

The results show the total effects of energy conservation standards on employment for 

the selected years. Table 15.3.1 shows the estimated net national employment impacts of the 

seven different trial standard levels (TSLs) for the Class A beverage vending machine 

equipment. A detailed discussion of the TSLs can be found in chapter 9 of the TSD. The figure 

shows that for a given year over the period of analysis (2012–2042), the change in the number of 

jobs in the economy relative to the number of jobs if there were no change in standards and 

hence no resulting change in spending and cash flow patterns throughout the economy. 

Table 15.3.1 Net National Change in Jobs for Class A Beverage Vending Machines 

TSL Net National Change in Jobs 

number of jobs 

2012 2022 2032 2042 

1 0 13 13 13 

2 4 67 69 82 

3 17 142 159 172 

4 30 221 238 265 

5 42 256 285 313 

6 44 286 316 344 

7 157 402 444 475 

Similarly, Table 15.3.2 shows the net national employment impacts of the beverage 

vending machine energy conservation standards by TSL and specified years for the entire and 

beverage vending machine markets. 

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Table 15.3.2 Net National Change in Jobs for Class B Beverage Vending Machines 

TSL Net National Change in Jobs 

number of jobs 

2012 2022 2032 2042 

1 1 6 6 6 

2 1 9 9 10 

3 8 41 45 49 

4 9 47 52 55 

5 58 138 150 162 

6 166 193 204 216 

As shown in Table 15.3.1 and Table 15.3.2, the beverage vending machines energy 

conservation standards have virtually no initial impact on jobs and have a small, positive impact 

on jobs in later years. This is explained by the fact that the required initial investment in the 

standards-compliant equipment costs a few jobs because the investment is capital-intensive 

relative to other spending in the economy that would be displaced to pay for the investment. 

However, in the long term, the benefit to the economy of the energy savings from the installed 

equipment more than makes up for the initial investment, and the net effect on employment is 

positive. The long-term positive and increasing impact occurs because the energy savings in 

future years are obtained from both current and previous efficiency investments reflected in the 

installed stock of efficient equipment, while investment costs for the production of efficient 

equipment occur only once. 

In summary, DOE estimates that net indirect employment impacts from a beverage 

vending machines energy conservation standard are positive but very small. 

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REFERENCES 

1. Scott, M. J., O. V. Livingston, J. M. Roop, R. W. Schultz, and P. J. Balducci. ImSET 3.1: 

Impact of Sector Energy Technologies Model Description and User’s Guide. 2009. Pacific 

Northwest National Laboratory: Richland, WA. Report No. PNNL-18412. 

2. Stewart, R. L., J. B. Stone, and M. L. Streitwieser. Survey of Current Business: U.S. 

Benchmark Input-Output Accounts, 2002. October 2007. (Last accessed March 11, 2009.) 

<http://www.bea.gov/industry/index.htm#benchmark_io> 

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