Estimates of Job Generation in the Travel and Tourism Industry

In response to a congressional request, GAO compared and contrasted the estimated effects of different categories of spending on employment in the travel and tourism industry. GAO used estimates made by the travel and tourism industry as well as other estimates of the job creation effects of expenditures on defense, exports, and public works projects.

GAO found that the employment estimates vary widely both within and among the expenditure categories. In addition, the estimates are not directly comparable because they: (1) are derived from different types of models; (2) define jobs differently; (3) are based on spending in different years; and (4) are based on different data sources. Estimates of the employment effects of defense, public works, and export expenditures are derived from input-output models, while direct employment estimates for the travel and tourism industry are based on a ratio model. The ratio model is hard to compare with the input-output model since it estimates the average number of jobs while the input-output model estimates the additional number of jobs created by an increase of a billion dollars in spending, given the current spending level. The difference between direct, indirect, and induced jobs also limits comparisons between the employment estimates. The travel and tourism estimate does not include induced jobs.