CCSI prepared a report on measuring employment from extractive industry investments that outlines two modeling techniques used to estimate employment multipliers: 1) The input-output (IO) model, and 2) The computable general equilibrium (CGE) model. The Handbook on Measuring Employment from Extractive Industry Investments explains the advantages, disadvantages, necessary inputs, and results associated with each model.
Specifically using the IO model, the handbook provides a detailed 10-step approach to calculating employment multipliers from the extractive industries. Included are links to download a sample IO table and links to download sample data. Here is a model to show a user how to compute multipliers step-by-step.
The handbook acknowledges that results are only as good as the data being input, which can be strained due to limited availability in national accounts. It encourages more transparency of employment multiplier studies, which have historically omitted clarification on the underlying assumptions and calculation methods. While the model will yield specific numeric outcomes, the results should be interpreted as directional patterns when it comes to scrutinizing job creation claims by either companies or governments.