Pentagon and the Service Sector

摘要

The substantial literature on military spending has largely overlooked the service sector, in which the vast bulk of the U.S. labor force is employed. This paper focuses on Pentagon prime contracts to service firms in 1990, including their sectoral and spatial distribution. The analysis employs a series of 51 state-specific regionalized input-output models to estimate the employment effects of prime contracts to service firms, which generated a total of more than 620,000 jobs. The occupational composition of this employment is compared to that of the labor force as a whole. The conclusion points to the policy implications of potential reductions in such funding.