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The Effects of Travel and Tourism on California's Economy: a Labor The Effects of Travel and Tourism on California’s Economy A Labor Market–Focused Analysis Matthew D. Baird, Edward G. Keating, Olena Bogdan, Adam C. Resnick C O R P O R A T I O N For more information on this publication, visit www.rand.org/t/RR1854 Library of Congress Cataloging-in-Publication Data is available for this publication ISBN: 978-0-8330-9736-1 Published by the RAND Corporation, Santa Monica, Calif. © Copyright 2017 RAND Corporation R® is a registered trademark. Cover: GettyImages/davemantel. Limited Print and Electronic Distribution Rights This document and trademark(s) contained herein are protected by law. This representation of RAND intellectual property is provided for noncommercial use only. Unauthorized posting of this publication online is prohibited. Permission is given to duplicate this document for personal use only, as long as it is unaltered and complete. Permission is required from RAND to reproduce, or reuse in another form, any of its research documents for commercial use. For information on reprint and linking permissions, please visit www.rand.org/pubs/permissions. The RAND Corporation is a research organization that develops solutions to public policy challenges to help make communities throughout the world safer and more secure, healthier and more prosperous. RAND is nonprofit, nonpartisan, and committed to the public interest. RAND’s publications do not necessarily reflect the opinions of its research clients and sponsors. Support RAND Make a tax-deductible charitable contribution at www.rand.org/giving/contribute www.rand.org Preface Visit California, a 501(c)6 nonprofit corporation formed in 1998 to market California as a desirable tourism destination, asked the RAND Corporation to estimate the effects of travel/ tourism on the state’s economy. Visit California works in close coordination with Califor- nia’s Division of Tourism; the organization conducts marketing programs that drive visitation, while the Division of Tourism oversees the assessment program that helps fund these initia- tives. Visit California operates under the auspices of the Governor’s Office of Business and Eco- nomic Development (GO-Biz). The GO-Biz director serves as chairperson of the organization. RAND was asked to prepare a study using data on California tourism and California’s labor force to provide insight about who works in tourism in California and how these individuals’ careers evolve. This report should be of interest to policymakers and researchers interested in economic development issues and labor force career pathways. This research was undertaken within RAND Labor and Population. RAND Labor and Population has built an international reputation for conducting objective, high-quality, empiri- cal research to support and improve policies and organizations around the world. Its work focuses on children and families, demographic behavior, education and training, labor mar- kets, social welfare policy, immigration, international development, financial decisionmaking, and issues related to aging and retirement with a common aim of understanding how policy and social and economic forces affect individual decisionmaking and human well-being. For more information on RAND Labor and Population, contact the unit director: Unit Director, RAND Labor and Population, 1776 Main Street, P.O. Box 2138, Santa Monica, CA 90407-2138, (310) 393-0411, or visit the Labor and Population website at www.rand.org/labor. iii Contents Preface ........................................................................................................... iii Figures ...........................................................................................................vii Tables ............................................................................................................ ix Summary ........................................................................................................ xi Acknowledgments .............................................................................................xv Abbreviations ................................................................................................. xvii CHAPTER ONE Introduction ..................................................................................................... 1 CHAPTER TWO Basic Statistics About the Travel/Tourism Industry in California .................................... 5 Data Sources ...................................................................................................... 5 Worker Demographics ........................................................................................... 7 Levels of Employment and Gross State Product .............................................................. 7 Wages, Hours, and Ages .......................................................................................15 Summary ........................................................................................................ 20 CHAPTER THREE Data Describing Entrants into and Separators Away from California’s Travel/Tourism Industry ................................................................................21 Data on Entrants and Separators ............................................................................. 22 Regression Analysis ............................................................................................ 30 Summary .........................................................................................................32 CHAPTER FOUR Supplemental Analyses .......................................................................................35 National-Level Data ............................................................................................35 A More-Inclusive Definition of the Industry ............................................................... 40 Use of the 2004–2007 SIPP .................................................................................. 44 Summary ........................................................................................................ 50 CHAPTER FIVE Discussion .......................................................................................................51 v vi The Effects of Travel and Tourism on California’s Economy: A Labor Market–Focused Analysis APPENDIX Economic Multipliers: What Are They and What Do They Mean? ..................................53 References .......................................................................................................57 Figures 2.1. Estimated Travel/Tourism Employment in California, 1991–2015 .......................... 9 2.2. Estimated Travel/Tourism Employment in California Compared with Selected Other Industries, 1991–2015 .......................................11 2.3. Estimated Travel/Tourism Annual GSP in California, 1997–2014 .........................11 2.4. Estimated Travel/Tourism Annual GSP in California Compared with Selected Other Industries, 1997–2014 .......................................13 2.5. Estimated Annual Travel/Tourism Employment Levels in California, 2009–2013 .......13 2.6. Average Wages in California Across Data Sources, 2009–2013 .............................15 2.7. California Travel/Tourism Workers by NAICS Code, 2009–2013 .........................16 2.8. Distribution of California Workers’ Weekly Hours of Work Inside and Outside of Travel/Tourism, 2009–2013 ...........................................17 2.9. Distribution of California Workers’ Ages Inside and Outside of Travel/Tourism, 2009–2013 ......................................................................18 2.10. Distribution of California Workers’ Hourly Wages Inside and Outside of Travel/Tourism, 2009–2013 ........................................................19 3.1. Estimated Annual Entrants into and Separators Away from California’s Travel/Tourism Industry, 2010–2013 ............................................ 22 3.2. Average Annual Percentage of Entrance and Separation for Comparison Industries, 2010–2013 ............................................................ 23 3.3. Previous-Year Status of Entrants into Comparison Industries in California, 2010–2013 ........................................................................ 24 3.4. Age Distribution of Entrants into Comparison Industries in California, 2010–2013.....25 3.5. Educational Backgrounds of Entrants into Comparison Industries in California, 2010–2013 ........................................................... 26 3.6. Year-After Status of Separators Away from Comparison Industries in California, 2010–2013 ........................................................................ 27 3.7. Average Change in Wages from Previous Year in California Travel/Tourism, 2010–2013 ..................................................................... 28 3.8. Percentage of Employed Industry Separators Receiving 50-Percent-or-Larger Wage Increase, 2010–2013 ..............................................29 3.9. Average Annual Change in Wages from Previous Year by Industry, 2010–2013 ......... 30 3.10. Logistic Regression Predicted Probabilities of Travel/Tourism Employment ...............31 4.1. Average Travel/Tourism Wages Across Data Sources in California and Nationally, 2009–2013......................................................... 36 4.2. Distribution of Travel/Tourism Workers’ Hourly Wages in California and Nationally, 2009–2013..........................................................37 4.3. Average Annual Percentage Entrance and Separation in California
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