The impact of casinos on employment across sectors in Macau

This paper investigates a contemporary issue of Macau concerning the impact of casinos on other sectors’ employment. The long-run and short-run effects are investigated using data-oriented econometric models. In the long-run, the casino boom leads to an employment expansion in other sectors. However, the effect is insignificant in the short-run. Simulations from a theoretical model disclose the pure crowding-out effect of the increased casino employment on other sectors with other things the same as the situation of 2003. During the period 2004–2008, the crowding-out effect is more serious on the non-casino service sector than on the industrial sector. Results from both types of models shed light on policy options.