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The defense buildup, 1977-85:
effects on production and employment
Much of the defense buildup during the 1980-85 period required production from durable manufacturing industries in which nondefense production was either declining or growing slowly.1 Increasing defense outlays, therefore, cushioned a reduction in production jobs, even though defense accounted for only a small portion of total output and employment of these industries.
This article provides estimates of output and employment levels during the current defense buildup, which began in 1977. With special emphasis on the high growth 1980-85 period, the study shows the impact of increased U.S. military spending on industries with defense-related production.
This excerpt is from an article published in the August 1987 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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1 This article summarizes a study conducted jointly by the U.S. Department of Commerce's Office of Business Analysis and the Bureau of Labor Statistics' Office of Economic Growth and Employment Projections, to estimate the output and employment effects on U.S. industries of the increases in defense spending which began in 1977. The study uses the total industry production as published by the Bureau of Census and total industry employment as published by the Bureau of Labor Statistics. The defense portion of production and employment is estimated using interindustry models which attempt to capture the relationship between defense purchases, industry production levels, and associated employment requirements.
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