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Arthur E. Andreassen and Jay M. Berman
T he Bureau of Labor Statistics recently published its biennial projections of the U.S. economy.1 In a variation of the BLS moderate-case scenario that focuses on infrastructure spending for 2005, this article projects that an additional $41 billion in infrastructure investment would generate 833,000 new jobs. Most of these jobs would be in construction and related industries, as demand shifted into occupations with a close connection to working on the Nation's infrastructure.
As in the past, the BLS projections contain three alternatives covering the most plausible range of gross domestic product and its demand components, along with the expected change in employment by industry and occupation. Within this range of gross domestic product and employment are other paths the economy might follow if different events affect the distribution of demand. By varying the moderate scenario for 2005 to reflect other possible outcomes for selected demand categories, special assumptions can be derived and studied. In what follows, we analyze two such modifications of the moderate scenario, each focused on infrastructure spending.2
As will be shown, even under optimistic assumptions about future growth, the impact of infrastructure spending on employment is not great in total. However, this spending does affect certain industries, such as construction, very heavily. Note that the article focuses on infrastructure spending per se and does not examine the productivity increases this type of investment might have on other parts of the economy.
This excerpt is from an article published in the April 1994 issue of the Monthly Labor Review. The full text of the article is available in Adobe Acrobat's Portable Document Format (PDF). See How to view a PDF file for more information.
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Footnotes
1 See Monthly Labor Review, November 1993.
2 Although BLS depends on a model to project economic variables for 2005, the analysis we present does not use that model to drive the various infrastructure spending levels. This is because the areas targeted for more outlays are fairly detailed-well beyond the detail in the macroeconomic model used by BLS.
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