ABP: Using Labor Income Events

Introduction:

Analysis-by-Parts is a technique by which you can analyzed the impact of an Industry's production/spending in separate components using multiple Events instead of using a single Industry Event. The purpose of this article is to explain how to analyze the Labor Income portion of an Analysis-by-Parts (ABP) using Labor Income Events. 

Detailed Information:

Labor Income

You will need to setup a Labor Income Event either for Employee Compensation (EC), Proprietor Income (PI), or both to capture the effects associated to the Direct labor payments on the economy.

Specification then defines the type of Labor Income that should be entered as the Value.

• If you have only a total Labor Income value, you can:
  1. Enter all of the value as Employee Compensation in one Labor Income Event.
  2. Or, find the % of Output going to Employee Compensation and Proprietor Income based on regional information found in Region Details > Social Accounts > Balance Sheets > Industry Balance Sheet > Value Added.
• If you have a split of Employee Compensation and Proprietor Income create the Event(s) accordingly.
• Remember, these should be fully loaded payroll values which include wage and salary, all benefits (e.g., health, retirement) and payroll taxes (both sides of social security, unemployment taxes, etc.).  You can use the following resource to convert your wage and salary income to an Employee Compensation value as well as to convert an Employee Compensation value in the IMPLAN data or Results to a wage and salary income value. 
  
  
• The Labor Income Event(s) and the Event(s) analyzing the Industry's Intermediate Expenditures should be dropped into a Group in which the Dollar Year, Data Year and Region have been defined appropriately. Then, click Run.

What to expect in your results

Since Direct results are not analyzed with this methodology, they are also not reported. Final results require adding the Direct Effects into the table and re-summing the totals.

The Labor Income Event(s) will only generate Induced Effects. The Direct Effect of the Labor Income Event(s) analyzed is simply the total value of the Labor Income analyzed. This value is the total value of Direct Labor Income and should also be included in Direct Value Added and Direct Output as Labor Income is a component of Value Added and Value Added is a components of Output. 

 Updated February 20, 2020