QUESTION: In doing an impact using industry 142 in cook county Illinois the employment multiplier is 35. However for the same industry in Will county the employment multiplier is 7.2. The figures for employee compensation are also significantly different. Please let me know if there is an error in the data? If there is no error in data, why are the employment multipliers so different? ANSWER: Actually employee compensation is similar, it is the labor income per worker that is quite different. REIS data indicates a large amount of proprietor income for petroleum industries (implan sectors 142-146) so 142 received a share of it. Proprietor income increases the induced effect and a sector with such a huge output per worker, it doesn't take much to increase the type SAM multiplier. Remember that the Type SAM employment multiplier = (direct+indirect+induced)/direct. If the direct is very small (large output per worker) we can get a large type SAM multiplier. If you can justify that 142 is corporate only, you can shift the profit from proprietor income to other property type income and zero out the proprietor income (in Cook county). This requires editing the study area data for industry 142. This will make the employment multiplier more similar to Will county.
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