Local multiplier of industrial employment: Brazilian mesoregions (2000-2010)

Vol. 36 No. 4 (2016)

Oct-Dec / 2016
Published October 1, 2016

How to Cite

Macedo, Guilherme, and Leonardo Monasterio. 2016. “Local Multiplier of Industrial Employment: Brazilian Mesoregions (2000-2010)”. Brazilian Journal of Political Economy 36 (4):827-39. https://doi.org/10.1590/0101-31572015v36n04a09.

Local multiplier of industrial employment: Brazilian mesoregions (2000-2010)

Guilherme Macedo
PhD Candidate at Birkbeck, University of London,
Leonardo Monasterio
Professor ata Universidade Católica de Brasilia (UCB) and researcher at Instituto de Pesquisa Econômica Aplicada (IPEA),
Brazilian Journal of Political Economy, Vol. 36 No. 4 (2016), Oct-Dec / 2016, Pages 827-839


This paper estimates the local multiplier of manufacturing for Brazil (2000-2010). The method is based on Moretti (2010) and on Moretti and Thulin (2012), who estimated these multipliers for the U.S. and Sweden. The local multiplier of manufacturing estimates the impacts of employment changes in the industrial sectors on employment in the services sectors, and the impact of changes in employment in the high-tech and low-tech tradable sectors on employment in the services sectors. These estimates help to assess the importance of industrial employment changes over local economies. We created instrumental variables, based on the shift-share method. The employment data cover 21 economic subsectors and 123 regions in 2000, 2005 and 2010. We have estimated that in the Brazilian mesorregions, for each new job in the tradable sectors, almost four jobs were created locally in the services sectors. Additionally, each job in the high-tech industrial sectors was estimated to create approximately seven jobs in the services sectors over the long term.

JEL Classification: J21; J88; R12; R23.

Keywords: regional economics labour market local multipliers shift-share