Office of Operations Freight Management and Operations

Highway Operations Spending as a Catalyst for Job Growth (Page 1 of 5)

July 18, 2003

Prepared for

Federal Highway Administration
Department of Transportation

Prepared by

MacroSys Research and Technology
Washington, DC

Executive Summary

The creation of jobs is a major benefit of highway infrastructure spending. Many models have been developed to estimate the number of jobs created by spending on highway construction projects. In contrast, spending on highway operations receives far less attention, even though operations and maintenance have become relatively more important than construction since the Interstate system was (largely) completed. The number and nature of jobs created by spending on highway operations differs significantly from jobs created by new construction. Each type requires a different skill set and has a unique pay scale. A model that projects the level of employment generated by highway operations funding is needed. This new model will provide policymakers with employment forecasts specific to highway operations projects, as distinct from construction projects.

The research presented in this report provides such a model, based on the Transportation Satellite Accounts. Many sources of data were analyzed to develop the spending levels, employment structure, and average employee compensation for major categories of highway operations activities. The model's employment estimate includes direct hires in highway operations and indirect employment through purchases of commodities and services supporting highway operations.

In 2000, highway operations spending accounted for more than 15 percent of total expenditures on state-administered highways, generating a total of 184,854 full-time job equivalents. This equaled 17,810 jobs per billion dollars spent, on average. Traffic supervision, toll collection, and snow and ice removal were the three largest job-creating activities associated with highway operations. Together, they accounted for about 65 percent of all jobs created by highway operations spending.

Comparison of Employment Effects in Highway Operations and Construction (full-time job equivalents per billion dollars*)
empty cell Highway Operations Highway Construction (FHWA) Highway Construction (BLS) JOBMOD
(Version 1.1)
Direct employment 12,231 7,250 NA NA
Indirect employment 5,579 18,080 NA NA
Total employment 17,810 25,330 16,298 21,219

Source: U.S. Department of Transportation, Federal Highway Administration and U.S. Department of Labor, Bureau of Labor Statistics. JOBMOD is a software program that estimates the economic impact of highway construction.

*All estimates are based on 2000 dollars, except for those from JOBMOD, for which the information for a specific year cannot be found in the materials available.

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