Calculate the employment multiplier or missing direct, indirect, or induced employment using an explicit solve mode and the other three known values.

Enter direct, indirect and induced employment.

Use consistent job counts or full-time-equivalent estimates, for the same region, period and model. This calculator does not predict impacts.

Employment Multiplier Formula

The following formula is used to calculate the employment multiplier.

EM = (DE + IE + INE) / DE

Variables:

  • EM is the employment multiplier
  • DE is the direct employment
  • IE is the indirect employment
  • INE is the induced employment

To calculate this total-to-direct employment multiplier, sum direct, indirect, and induced employment and divide by positive direct employment. Use the same job or full-time-equivalent basis, region, period and model for all three inputs. This ratio includes induced effects and is not a jobs-per-dollar final-demand multiplier.

What is an Employment Multiplier?

An employment multiplier measures the total employment impact that an industry or business has on the economy. It accounts for not only the direct jobs created by the business but also the indirect jobs created through the supply chain and the induced jobs created by the spending of those employed directly or indirectly. The ratio summarizes supplied model estimates; it does not itself predict effects, establish causation or measure net economic benefit.

How to Calculate Employment Multiplier?

The following steps outline how to calculate the Employment Multiplier.

  1. First, determine the direct employment (DE) created by the business or industry.
  2. Next, determine the indirect employment (IE) created through the supply chain.
  3. Then, determine the induced employment (INE) created by the spending of those employed directly or indirectly.
  4. Use the formula from above = EM = (DE + IE + INE) / DE.
  5. Select Employment multiplier and enter the three employment values, then select Calculate. For an inverse, select the missing employment component and enter the other three values.
  6. After inserting the variables and calculating the result, check your answer with the calculator above.

Example Problem : 

Use the following variables as an example problem to test your knowledge.

Direct Employment (DE) = 100 jobs

Indirect Employment (IE) = 50 jobs

Induced Employment (INE) = 30 jobs