Estimating the Employment Impacts of Tourism to a Nation

Abstract

The paper discusses the impact on national employment of an increase in foreign tourism expenditure. The paper will firstly review existing work, based on multiplier analysis, input-output studies and computable general equilibrium models. The deficiencies and advantages of these different approaches will be assessed. Special attention will be paid to assessing the employment impacts of tourism expenditure in a general equilibrium framework wherein cancelling effects are recognised. The paper then discusses potential impacts of tourist expenditure on employment levels under different assumptions about the causes of unemployment generally, and with particular reference to segmentation in markets for tourism related labour. While Australian data is used, the analysis is of general interest. The paper concludes with a discussion of issues for further research.