Table 7

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

Debt Revenue, progressive Revenue, regressive Transfer cuts Regulatory mandates
Total amount of spending ($billions) $250 $250 $250 $250 $250
Gross GDP increase from spending ($billions) $400 $400 $400 $400 $400
Gross employment increase from spending 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000
Gross GDP decrease from financing ($billions) $0 $88 $225 $400 $50
Gross employment decrease from financing 0 656,250 1,687,500 3,000,000 375,000
Net GDP increase from package ($billions) $400 $313 $175 $0 $350
Net employment increase from package 3,000,000 2,343,750 1,312,500 0 2,625,000

Note: Multipliers are based on evidence reviewed in Bivens (2011) and Bivens (2012c). Specifically, the multiplier for infrastructure investments 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 between 2014 and 2020 as described in the text.

Source: Author's analysis of Bureau of Labor Statistics Employment Requirements Matrix industry codes receiving spending flows to finance across-the-board increase in traditional infrastructure to close infrastructure deficit identifed by ASCE (2013)

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