Employment and GDP impacts of U.S. infrastructure investment under various financing options, Scenario Two

Debt Revenue, progressive Revenue, regressive Transfer cuts Regulatory mandates
Total amount of spending ($billions) $92 $92 $92 $92 $92
Gross GDP increase from spending ($billions) $147 $147 $147 $147 $147
Gross employment increase from spending 1,104,000 1,104,000 1,104,000 1,104,000 1,104,000
Gross GDP decrease from financing ($billions) $0 $32 $83 $147 $18
Gross employment decrease from financing 0 241,500 621,000 1,104,000 138,000
Net GDP increase from package ($billions) $147 $115 $64 $0 $129
Net employment increase from package 1,104,000 862,500 483,000 0 966,000

Note: Multipliers are based on evidence reviewed in Bivens (2011) and Bivens (2012c). Specifically, the multiplier for infrastructure investment is 1.6, the muliplier for regressive tax increases is (-)0.9, the multiplier for progressive tax increases is (-)0.35, the multiplier for transfers is 1.6, and following Bivens (2012c), 20 percent of the stimulative effect of investments driven by regulatory mandates are crowded out. For employment impacts, we assume each percentage-point addition to GDP adds 1.2 million jobs to the economy. The total spending figures are based on the infrastructure investment scenarios and are annual gains taking place over the next decade as described in the text.

Source: Author's analysis of Congressional Budget Office (2012); Electric Power Research Institute (2011); and Pollin, Heintz, and Garrett-Peltier (2009)

View the underlying data on epi.org.