Indirect labour market impacts: Spillovers, displacement and policy evaluation

Abstract

This survey reviews approaches to measuring indirect labour market effects of policies and shocks. Fixed‐price multipliers organize gross supply‐chain and expenditure linkages, but do not generally measure net job creation. Regional exposure and quasi‐experimental designs provide credible evidence on local responses, but usually identify relative local effects rather than aggregate incidence. Spatial and sectoral general equilibrium models can trace spillovers, displacement, and welfare effects, but require empirical discipline. Recent work on trade shocks, fiscal multipliers, procurement, and place‐based policy shows the value of combining regional exposure evidence with spatial general equilibrium structure. The survey draws implications for Canadian policy evaluation.