Inter-Industry Employment Spillovers from Tourism Inflows
29 Pages Posted: 20 Sep 2011 Last revised: 27 Aug 2012
Date Written: July 1, 2012
How much economic stimulus does tourism provide by generating jobs in various local industry sectors? Using data across 43 U.S. metropolitan statistical areas during 1987-2006, we analyze the impact of tourism inflows - proxied by the number of hotel rooms sold - on the employment in 22 non-hotel industries. We estimate a dynamic labor demand model with inter-industry spillover effects, using various estimators including GMM-based dynamic panel methods. We find statistically and economically significant effects – an additional 100 rooms sold per day during a year in a given MSA generates between 2-5 new jobs per non-hotel industry in that area. Subsample analyses across industries indicate that construction, retail, health care, professional and technical services are among the largest beneficiaries of these spillovers.
Keywords: labor demand, spillovers, tourism, industry-linkages, dynamic panel data models
JEL Classification: J23, O4, L83, C33
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