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United States Government Accountability Office:
GAO:
Report to Congressional Committees:
May 2013:
Export-Import Bank:
More Detailed Information about Its Jobs Calculation Methodology Could
Improve Transparency:
GAO-13-446:
GAO Highlights:
Highlights of GAO-13-446, a report to congressional committees.
Why GAO Did This Study:
Ex-Im provides loans, guarantees, and insurance to U.S. exporters. One
of Ex-Im’s primary missions is to support U.S. jobs through exports.
In its 2012 annual report, Ex-Im stated that its financing helped
support an estimated 255,000 export-related U.S. jobs.
In 2012, Congress passed the Export-Import Bank Reauthorization Act of
2012. The act required GAO to report on the process and methodology
used by Ex-Im to calculate the effects of export financing on U.S.
employment. This report (1) describes the methodology and processes Ex-
Im uses to calculate the effects of its financing on U.S. employment
and (2) examines the limitations of Ex-Im’s approach and how Ex-Im
reports on its methodology, and provides additional related information.
To address these objectives, GAO reviewed relevant Ex-Im documents,
obtained and reviewed the data Ex-Im uses for its calculations, and
interviewed agency officials and trade policy researchers.
What GAO Found:
The U.S. Export-Import Bank’s (Ex-Im) methodology to calculate the
number of U.S. jobs associated with the exports it helps finance has
four key steps. First, Ex-Im determines the industry associated with
each transaction it finances. Second, Ex-Im calculates the total value
of exports it supports for each industry. Ex-Im implements these first
two steps using its own data. Third, Ex-Im multiplies the export value
for each industry by the Bureau of Labor Statistics (BLS) ratio of
jobs needed to support $1 million in exports in that industry—a figure
known as the “jobs ratio.” Finally, Ex-Im aggregates across all
industries to produce an overall estimate. The following figure
depicts each step of the process.
Figure: The Four-Step Process Involved in Ex-Im’s Jobs Calculation
Methodology:
[Refer to PDF for image: illustration]
Step 1: Industry Classification:
Ex-Im determines and applies the specific industry code to each
transaction[A] it finances.
Step 2: Export Value by Industry:
Ex-Im determines the value of all exports it supports in a particular
industry.
Step 3: Multiply Export Value by BLS Job Ratio:
Ex-Im multiplies the export value by the BLS ratio of jobs needed to
support $1 million in exports in that industry.
Ex-Im repeats steps 2 and 3 for all industries it supports.
Step 4: Sum Estimate of Jobs Ex-Im Supports Across All Industries:
This equals the estimate of the total number of jobs Ex-Im supports in
all industries per year.
Source: GAO analysis of information from Ex-Im.
[A] According to Ex-Im, one transaction could have multiple contracts
and therefore multiple industry codes. Each industry code is
associated with a specific contract.
[End of figure]
Ex-Im reports the number of jobs its financing supports and the
methodology it uses but does not describe limitations of the
methodology or fully detail its assumptions. Although the BLS data
tables that Ex-Im relies on are based on a commonly used methodology,
this methodology has limitations. For example, the employment data are
a count of jobs that treats full-time, part-time, and seasonal jobs
equally. In addition, the data assume average industry relationships,
but Ex Im’s clients could be different from the typical firm in the
same industry. Further, the underlying approach cannot answer the
question of what would have happened without Ex-Im financing. Ex-Im
does not report these limitations or fully detail the assumptions
related to its data or methodology. GAO’s Standards for Internal
Controls in the Federal Government states that, in addition to
internal communication, management should ensure adequate
communication with external stakeholders, which could include Congress
and the public. Because of a lack of reporting on the assumptions and
limitations of its methodology and data, Congressional and public
stakeholders may not fully understand what the jobs number that Ex-Im
reports represents and the extent to which Ex-Im’s financing may have
affected U.S. employment.
What GAO Recommends:
To ensure better understanding of its jobs calculation methodology,
GAO recommends that Ex-Im improve reporting on the assumptions and
limitations in the methodology and data used to calculate the number
of jobs Ex-Im supports through its financing. Ex-Im agreed with the
recommendation and stated that it would begin reporting more detailed
information in its fiscal year 2013 annual report.
View [hyperlink, http://www.gao.gov/products/GAO-13-446]. For more
information, contact Lawrance L. Evans, Jr. at (202) 512-5366 or
evansl@gao.gov.
[End of section]
Contents:
Letter:
Background:
Ex-Im Methodology to Estimate the Number of Jobs It Supports Is Based
on Export Values and Labor Statistics:
Ex-Im Does Not Report Important Details about Its Approach, Including
Limitations:
Alternative Methodologies Address Some Limitations but Have Other
Drawbacks:
Conclusions:
Recommendation for Executive Action:
Agency Comments and Our Evaluation:
Appendix I: Objectives, Scope, and Methodology:
Appendix II: Comments from the Export-Import Bank of the United States:
Appendix III: Comments from the Department of Commerce:
Appendix IV: GAO Contact and Staff Acknowledgments:
Figure:
Figure 1: The Four-Step Process Involved in Ex-Im's Jobs Calculation
Methodology:
Abbreviations:
BEA: Bureau of Economic Analysis:
BLS: Bureau of Labor Statistics:
Commerce: Department of Commerce:
ERT: Employment Requirements Tables:
Ex-Im: Export-Import Bank of the United States:
G-7: Group of Seven:
ITA: International Trade Administration:
NAICS: North American Industry Classification System:
[End of section]
United States Government Accountability Office:
GAO:
441 G St. N.W.
Washington, DC 20548:
May 23, 2013:
The Honorable Tim Johnson:
Chairman:
The Honorable Mike Crapo:
Ranking Member:
Committee on Banking, Housing, and Urban Affairs:
United States Senate:
The Honorable Jeb Hensarling:
Chairman:
The Honorable Maxine Waters:
Ranking Member:
Committee on Financial Services:
House of Representatives:
As the nation's official export credit agency, the Export-Import Bank
of the United States (Ex-Im) supports U.S. exporters by providing
loans, loan guarantees, working capital guarantees, and insurance. One
of Ex-Im's primary objectives is to contribute to maintaining or
increasing employment of U.S. workers through its financing. In its
2012 annual report, Ex-Im stated for fiscal year 2012 it had
authorized financing to support 3,796 export transactions with a total
estimated value of almost $50 billion. It reported that this financing
helped support an estimated 255,000 export-related U.S. jobs.
In 2012, Congress passed the Export-Import Bank Reauthorization Act of
2012.[Footnote 1] The act required GAO to report on the process and
methodology used by Ex-Im to calculate the effects of its export
financing on the creation and maintenance of employment in the United
States. This report (1) describes the methodology and processes Ex-Im
uses to calculate the effects of its financing on employment in the
United States, (2) examines the limitations of Ex-Im's approach and
how Ex-Im reports on its methodology, and (3) describes alternative
methodologies and their limitations.
To address these objectives, we reviewed relevant documentation
related to Ex-Im, including annual reports, descriptions of the bank's
jobs calculation methodology, and press releases that included
information on the jobs supported by Ex-Im financing. We also obtained
the data Ex-Im uses to calculate the number of jobs supported by its
financing and used this data to replicate Ex-Im's calculation. We
found these data to be sufficiently reliable for the purposes of this
report. We interviewed Ex-Im officials from various divisions of the
organization. We spoke with officials from the Bureau of Economic
Analysis (BEA) and International Trade Administration (ITA) in the
Department of Commerce (Commerce) as well as the Bureau of Labor
Statistics (BLS) in the Department of Labor. We also reviewed relevant
documentation from these agencies. In addition, we spoke with
officials from other countries' export credit agencies to obtain
information on their efforts to determine the number of jobs
associated with their financing, and with selected trade policy
researchers to obtain their perspectives on Ex-Im's methodology. We
selected these researchers because GAO had consulted with them on
prior engagements related to export credit agencies based on their
knowledge of the issues, or they had been recommended to us through
interviews with knowledgeable government officials due to their
expertise in the area. In addition, we reviewed GAO's Standards for
Internal Control in the Federal Government,[Footnote 2] which states
that management should ensure there are adequate means of
communicating with, and obtaining information from, external
stakeholders that may have a significant impact on the agency
achieving its goals. Appendix I provides more information on our scope
and methodology.
We conducted this performance audit from August 2012 to May 2013 in
accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe
that the evidence obtained provides a reasonable basis for our
findings and conclusions based on our audit objectives.
Background:
Ex-Im operates under the authority of the Export-Import Bank Act of
1945, as amended.[Footnote 3] It is an independent agency of the U.S.
government.[Footnote 4] Ex-Im's mission is to support jobs in the
United States by facilitating the export of U.S. goods and services.
In fiscal year 2012, Ex-Im authorized about $35.8 billion, for 3,796
transactions, to support U.S. exports.[Footnote 5] Ex-Im is part of
the U.S. Trade Promotion Coordinating Committee, an interagency
committee chaired by Commerce and tasked with coordinating the export
promotion and financing activities of federal agencies. Ex-Im is also
a key participant in the National Export Initiative, a strategy
announced in 2010 to double U.S. exports by 2015 to support U.S.
employment.
Ex-Im provides four types of financing: direct loans, loan guarantees,
working capital guarantees, and export credit insurance.
* Direct loans: Medium-and long-term fixed-rate loans Ex-Im provides
directly to foreign buyers of U.S. goods and services.
* Loan guarantees: Medium-and long-term loan guarantees to lenders
that Ex-Im will pay the lender if the foreign buyer of U.S. goods and
services, who received the loan, defaults.
* Working capital guarantees: Guarantees to lenders for U.S.-based
companies to obtain short-term loans that facilitate the export of
goods and services. Working capital guarantee loans may be approved
for a revolving line of credit that supports multiple export sales or
a single loan that supports a specific export contract.
* Insurance: Short-and medium-term insurance Ex-Im provides to U.S.
exporters to protect them against the risk of nonpayment by foreign
buyers for commercial or political reasons.
To balance the interests of multiple stakeholders and Ex-Im's mission
to support U.S. jobs through export financing, Ex-Im has a domestic
content policy regarding the amount of U.S. content directly
associated with the goods and services exported from the United
States. Ex-Im's short-term transaction content policy requires at
least 50 percent U.S. content. For medium-and long-term transactions,
there is no minimum U.S. content requirement to receive a portion of
financing, but Ex-Im's support is limited to the lesser of (1) 85
percent of the total value of all eligible goods and services in the
U.S. export transaction,[Footnote 6] or (2) 100 percent of the value
of the domestic content in all eligible goods and services in the U.S.
export transaction.[Footnote 7] To be eligible for support, goods must
be shipped from the United States.
Other industrial countries have their own export credit agencies. For
example, the other Group of Seven (G-7) countries all have at least
one export credit agency.[Footnote 8] G-7 agencies differ in the
magnitude and types of their activities. All offer medium-and long-
term officially supported export credits. Export credit agencies also
can provide other products and services that can complicate
comparisons among institutions. Ex-Im's mission emphasizing supporting
domestic jobs through exports is unique among the G-7 agencies. Ex-
Im's charter states that the bank's objectives are to contribute to
maintaining or increasing the employment of U.S. workers by financing
and facilitating exports through loans, guarantees, insurance, and
credits. This mission underlies certain Ex-Im policies, such as its
economic impact analysis requirement and its domestic content policy.
Other export credit agencies' missions range from promoting and
supporting domestic exports to securing natural resources.
Ex-Im Methodology to Estimate the Number of Jobs It Supports Is Based
on Export Values and Labor Statistics:
To estimate the number of U.S. jobs associated with the exports it
helps finance, Ex-Im uses a methodology based on the input-output
approach. To apply this methodology, Ex-Im uses a BLS data product,
known as employment requirements tables (ERT) which are based on the
input-output methodology. It is important to understand the ERT
because these tables play an essential role in Ex-Im's jobs
calculation process. The ERT provide the total number of jobs (on
average) supported by production in each industry. These BLS data
allow Ex-Im to produce a measure that translates the value of the
exports it supports in each industry into an employment estimate for
that industry. In order to use the ERT, Ex-Im must rely on data from
its own system. Ex-Im's four-step process estimates the value of all
the exports it supports by the industries associated with those
exports. By combining data from the ERT and its own system and
aggregating across industries, Ex-Im produces an estimate of the total
jobs its financing supported.
Ex-Im Uses BLS Tables to Obtain Jobs Ratios--The Numbers of Jobs
Supported by Exports in Particular Industries:
The methodology Ex-Im uses relies on a basic input-output approach.
According to Ex-Im and Commerce officials, the basic input-output
approach was designated as the standard for U.S. government agencies
by the Trade Promotion Coordinating Committee and has the advantage of
generating a uniform jobs calculation methodology across the federal
government.[Footnote 9] The logic underlying the input-output modeling
approach assumes that the production of goods and services in an
economy uses inputs (such as labor) in fixed proportions.
Consequently, it is possible to determine the quantity of labor
required for a given level of production. To apply this methodology,
Ex-Im uses the ERT, data tables created by BLS, to estimate the number
of jobs associated with the specific value of exports Ex-Im supports,
rather than the value of total U.S. exports. The ERT are derived from
a set of data showing the relationship between industries, known as
input-output tables.[Footnote 10] For researchers using an input-
output approach, the ERT can be used for analyses that attempt to
estimate the employment effects of exports.
BLS develops the ERT so that users can analyze the job impact of
various types of expenditures, such as exports. The ERT contain, for
195 industries, the number of jobs required to produce one million
dollars of value in each industry (this report refers to this factor
as the "jobs ratio"). Because industries may vary widely in how many
jobs they support per million dollars of expenditure, it is important
for Ex-Im to correctly identify the industry associated with each
export transaction it finances.[Footnote 11] BLS produces two types of
ERT, one that includes the employment effects of both domestic and
imported production and another that removes the employment effects of
imports so that only domestic production is captured.[Footnote 12] Ex-
Im uses the domestic ERT to estimate the number of U.S. jobs
associated with its exports. While annual versions of the ERT are
produced, the most current year available as of May 2013 is 2010.
[Footnote 13]
Using the ERT, it is possible to obtain either the jobs supported
directly in a particular industry, or in a particular industry plus
the industries that support its production. For example, construction
directly supports jobs in the construction industry but also
indirectly supports jobs in industries that supply the material
necessary for construction, such as the steel industry. Ex-Im uses the
value that also includes employment in supporting industries, which
produces a larger jobs ratio. Sometimes this larger estimate is called
the "direct plus indirect effect" or "supply chain."
Ex-Im Follows a Four-Step Process to Calculate the Number of Jobs
Associated with Its Support:
Ex-Im's process for using the ERT has four steps. First, it determines
the industry associated with each transaction. In some cases, there
could be multiple industries associated with a transaction, if Ex-Im
financed multiple products in the transaction. Second, it determines
the total value of exports Ex-Im supports for each industry. Third, it
multiplies these export values by BLS's jobs ratio for each industry
to obtain the jobs for that industry. Finally, it aggregates across
all industries to produce an overall estimate. Figure 1 depicts each
step of the process.
Figure 1: The Four-Step Process Involved in Ex-Im's Jobs Calculation
Methodology:
[Refer to PDF for image: illustration]
Step 1: Industry Classification:
Ex-Im determines and applies the specific industry code to each
transaction[A] it finances.
Step 2: Export Value by Industry:
Ex-Im determines the value of all exports it supports in a particular
industry.
Step 3: Multiply Export Value by BLS Job Ratio:
Ex-Im multiplies the export value by the BLS ratio of jobs needed to
support $1 million in exports in that industry.
Ex-Im repeats steps 2 and 3 for all industries it supports.
Step 4: Sum Estimate of Jobs Ex-Im Supports Across All Industries:
This equals the estimate of the total number of jobs Ex-Im supports in
all industries per year.
Source: GAO analysis of information from Ex-Im.
[A] According to Ex-Im, one transaction could have multiple contracts
and therefore multiple industry codes. Each industry code is
associated with a specific contract.
[End of figure]
In step 1, Ex-Im either uses the industry code provided by the
applicant (the exporter or the lender) or relies on its engineers
(whom Ex-Im considers its in-house industry experts) to identify the
appropriate North American Industry Classification System (NAICS) code
for the contracts associated with each transaction Ex-Im finances or
supports.[Footnote 14] Ex-Im translates its data on transactions into
the same industry groups (i.e., NAICS-based codes) used by BLS. The
method by which Ex-Im obtains the NAICS code varies by length of
repayment term. For short-and medium-term financing and working
capital credit, the applicant (either the exporter or the lender)
provides the NAICS code. For long-term financing, Ex-Im engineers work
with the exporters and project sponsor to determine the NAICS code.
According to Ex-Im officials, to verify and assign NAICS codes in long-
term financing, Ex-Im uses both the guidance provided by the codebook
for assigning NAICS codes and the experience of the engineer.[Footnote
15]
In step 2, Ex-Im estimates a dollar value of exports it supports,
referred to as the export value. It does this for each transaction it
finances. However, according to Ex-Im officials, because Ex-Im
provides different types of financial products, it uses two different
methods to determine the export values.
1. For some financial products, such as direct loans and loan
guarantees, Ex-Im determines the export value after authorization--but
before disbursement--by using information provided on the exporter's
certificate.[Footnote 16] Specifically, Ex-Im determines the export
value by using the net contract price--the aggregate price of all
goods and services to be exported (i.e., U.S. content plus eligible
foreign content that does not include local costs). Ex-Im includes the
value of the purchase of goods and services that were financed by
entities other than Ex-Im. In other words, the export value is the
value of exports in purchase orders that were at least partially
financed by Ex-Im. According to Ex-Im officials, they generally
provided approximately 83 percent of the financing for medium and long-
term transactions for fiscal year 2010 through fiscal year 2012.
2. For other financial products, such as short-term insurance or
working capital, Ex-Im uses the entire value of the credit or the
insurance policy as the proxy for the export value. Because the export
value is not known at the time of authorization, Ex-Im cannot use the
net contract price to determine the export value. These products
include revolving lines of credit that may be drawn down multiple
times during the available period. Under this type of support, a
domestic exporter can access the credit to make purchases and later
repay the debt, thereby making additional credit available. According
to Ex-Im, this approach may result in an understatement of the total
value of the exports, as multiple purchases can occur without ever
reaching the limit. However, Ex-Im also confirmed that using the
entire value of the credit or insurance policy could result in an
overstatement, if all the credit is not used.
At the end of step 2, Ex-Im creates a summary table, where each row
contains the sum of export value in an industry. In step 3, Ex-Im
multiplies the export values for each industry by the appropriate jobs
ratio from the ERT. Finally, in step 4 it sums across all of the
industries to obtain a single estimate for the number of jobs it
supports.
Using this process, Ex-Im estimated 255,000 jobs supported in 2012. To
illustrate, on average, Ex-Im used the following steps:
* Ex-Im determined that it supported approximately $40 billion of
exports.
* On average, in fiscal year 2012, every million dollars of exports
supported by Ex-Im was associated with 6.5 jobs (based on the
industries that used Ex-Im financing, and the ERT).[Footnote 17]
* Finally, multiplying approximately 40 billion dollars of exports by
6.5 jobs per million results in approximately 255,000 jobs.
In order to verify our understanding of Ex-Im's jobs calculation
process, we obtained the individual transaction level data from Ex-Im,
including the export values and industry codes for each transaction.
We then merged that data with the most recent ERT from the BLS and
summed across all transactions. Using this data, we were able to
obtain close to Ex-Im's exact value for the total number of jobs
supported, thus confirming the process that Ex-Im described to us. For
more detail about our analysis, see appendix I.
Ex-Im Does Not Report Important Details about Its Approach, Including
Limitations:
The basic methodology used by Ex-Im has recognized limitations, and Ex-
Im also makes certain assumptions about its data. However, in its
reports, Ex-Im does not describe limitations or fully detail
assumptions that are inherent to the methodology. As a result,
stakeholders may not fully understand what the job number represents
or how to interpret it in the proper context.
Ex-Im Employs a Commonly Used Methodology; However, This Approach Has
Limitations:
Although the input-output approach on which the ERT are based is a
commonly used methodology, this approach has several limitations. Some
of these limitations are inherent to the ERT. Additional limitations
result from assumptions Ex-Im makes about its data on the industry
codes and export values for the export transactions it finances.
The limitations specific to the ERT are outside of Ex-Im's direct
control. For example, officials from Commerce and Ex-Im said that the
data in the ERT cannot be used to distinguish between jobs that were
newly created and those that were maintained. The ERT simply show the
direct and indirect (also known as supply chain) employment per $1
million of sales of goods to final users for each commodity, not
whether these are "jobs created" (employing previously unemployed
people or people out of the labor force, such as students), or "jobs
maintained" (continuing pre-existing employment). According to BLS
officials, it would be challenging to find data that can distinguish
between newly created and maintained jobs. Obtaining data detailed
enough to allow a researcher to make that distinction would require
many more resources than are currently available to BLS, according to
these officials. They added that this is a general limitation of the
input-output methodology, upon which the ERT are based, and which is a
standard methodology used to calculate average employment and other
inputs needed for a certain level of production. Because of the lack
of specificity and limitations, Ex-Im officials report that the jobs
are "associated with" or "supported by" Ex-Im financing.
Moreover, the documentation accompanying the ERT also describes
several limitations and assumptions to those data, including the
following: [Footnote 18]
* The employment data are a count of jobs, not of persons employed,
and treat full-time, part-time, and seasonal jobs equally.[Footnote
19] Persons who hold multiple jobs show up multiple times in the
employment data.
* The age of the data underlying the ERT is a general limitation of
BLS's employment requirements tables. The ERT incorporate a large
amount of data, which takes time to collect and put in the ERT
framework, according to BLS officials. Ex-Im is using the latest
available ERT, the 2010 ERT; however the industry relationships that
the ERT are based on come from 2002 data from BEA. BLS officials
stated that the current economy may be very different from the economy
in 2002, and the relationships reflected in the latest available ERT
are a decade old. BLS officials acknowledged, however, these data are
the best currently available for Ex-Im to use.[Footnote 20]
Furthermore, the ERT data assume average industry relationships;
however Ex-Im's clients could be different than the typical firm in
the same industry. For example:
* The ERT that are adjusted to reflect only domestic employment assume
that each industry's share of domestic versus international use of a
particular input is constant across industries. For example, these ERT
assume that the automobile industry uses the same proportion of
imported steel as the construction industry. Because of Ex-Im's
domestic content policy, agency officials said that Ex-Im does not
consider the exports supported by its financing to contain the same
level of imports as the industry averages. Ex-Im officials agreed that
this is a limitation but said that using BLS's adjusted ERT helps
ensure that imported content is accounted for to some extent. Ex-Im
officials told us they had not assessed the extent to which this
limitation affects the overall jobs estimate.
* In addition, officials from Export Development Canada[Footnote 21]
and Ex-Im and a trade policy researcher said that using input-output
methodology to calculate employment estimates for specific
transactions is also a limitation, since a particular export may be
different than the average for that industry.
The ERT also exclude the impact of spending that results from income
generated by Ex-Im supported jobs, sometimes called the multiplier
effect. For example, an increase in employment in a factory may result
in employment at a nearby restaurant. According to BLS, including
these additional consumer expenditures would result in a larger
employment impact.
Some limitations stem from Ex-Im's process for determining the
industry and export value. As discussed previously, during step 1 (as
shown in fig. 1), Ex-Im determines the industry associated with each
transaction. However, in some cases, Ex-Im has been unable to
determine the industry code. In cases where the NAICS code is missing
for transactions, Ex-Im has used the average across all of its other
industries as the jobs ratio.[Footnote 22] In almost all of those
cases we identified with missing NAICS codes (that had positive export
values), the type of support was short-term insurance. According to Ex-
Im, in short-term insurance, the lender may not know at the time of
authorization which exporter will benefit from the insurance coverage,
and this may explain why the NAICS code is not identified.
Ex-Im's jobs calculation methodology is also sensitive to certain
assumptions about how it determines the export value based on its
financing. For example, as discussed previously in step 2, using the
authorized amount as the export value for short-term insurance
transactions could overstate or understate the actual export value. In
addition, according to Ex-Im officials, the export value includes the
value of the purchase of goods and services that were financed by
entities other than Ex-Im.
Finally, according to government officials and trade policy
researchers, the methodology that Ex-Im uses does not answer the
question of what would have happened without Ex-Im financing. A
Commerce report[Footnote 23] and trade policy researchers we consulted
noted that in a high unemployment economy, additional exports may
result in additional jobs. However, in a low unemployment economy,
additional exports may result in jobs shifting from one firm to
another, without an increase in total employment.
Ex-Im Does Not Describe Limitations or Fully Detail Assumptions in Its
Reporting on Employment Effects:
Ex-Im reports the number of jobs its financing supports and the
methodology it uses but does not describe the limitations or fully
detail the assumptions related to its data or methodology. Ex-Im first
reported the total number of jobs it supports in its 2010 annual
report and started providing an overview of its methodology in its
2011 report. The 2012 report states that the Trade Promotion
Coordinating Committee identified this basic methodology as the
official U.S. government calculation of jobs supported through
exports. The report further states that Ex-Im uses the latest
available domestic ERT from BLS (which is based on input-output tables
from BEA), National Income and Product Accounts data (also from BEA),
and BLS industry employment data to calculate the number of jobs
associated with Ex-Im supported exports of goods and services.
Ex-Im has also reported the number of jobs it supports in various
other documents, including reporting to comply with the Government
Performance and Results Act, the Chairman's statements to Congress,
its website, and press releases. Some press releases that announce new
transactions also state the number of jobs associated with a specific
transaction. Most of the press releases we reviewed provide only a
brief statement about how Ex-Im calculates its job estimate. For
example, an October 2, 2012, press release announcing $105 million in
financing for an aquarium in Brazil states: "The transaction will
support approximately 700 American jobs, according to bank estimates
derived from Departments of Commerce and Labor data and methodology."
Ex-Im officials told us they use the results of its jobs calculations
for reporting purposes only. According to Ex-Im officials, Ex-Im
calculates the number of jobs supported for the transactions reviewed
by Ex-Im's Board of Directors, at the request of one of its board
members.[Footnote 24] Ex-Im board members stated that the purpose of
reporting these numbers is to give Congress a sense of the employment
effects of Ex-Im activities; they do not use them for decision making.
Board members also told us that the chief consideration when making a
financing decision is the credit worthiness of the firm. Officials
stated that they do not make decisions based on how many jobs would be
supported by a particular transaction.
However, none of Ex-Im's reporting discusses limitations or fully
details the assumptions in its data or in the methodology it uses.
Most of the limitations and assumptions are not specific to Ex-Im, but
are common to the methodology. For example, Ex-Im's brief discussion
of the methodology in its 2012 annual report does not explain that the
methodology does not allow it to differentiate between the number of
new jobs that were created and the number of jobs maintained as a
result of its financing. In addition, Ex-Im does not specify that jobs
associated with the multiplier effect are not captured in its jobs
estimates. Further, the report does not state that the employment
estimate is an overall count of jobs, not full-time equivalents. Thus,
the number of jobs that Ex-Im says it supports can include part-time
and seasonal jobs. Similarly, its press releases that include the
number of jobs associated with a specific transaction also do not
state the limitations and assumptions associated with the methodology.
Officials said that, in reporting the number of jobs associated with
Ex-Im financing, they clearly state that it is an estimate. Because it
is a nonfinancial and unaudited number, the caveat of "estimate"
seemed sufficient, according to Ex-Im officials. According to GAO's
Standards for Internal Control in the Federal Government, effective
communications should occur in a broad sense with information flowing
down, across, and up the organization.[Footnote 25] Management should
ensure there are adequate means of communicating with, and obtaining
information from, external stakeholders that may have a significant
impact on the agency achieving its goals. By not including more
information in its report, Ex-Im does not allow readers, including
Congressional and public stakeholders, to fully understand what the
jobs number represents or how to interpret it in the proper context.
Alternative Methodologies Address Some Limitations but Have Other
Drawbacks:
Although alternative methodologies may address some of the limitations
in Ex-Im's jobs calculation methodology, these alternatives have their
own limitations. Trade policy researchers we spoke to suggested
alternative methodologies that Ex-Im could potentially use to
calculate the effects of its financing on employment. However, these
methodologies have their own limitations, such as not including the
effects of Ex-Im financing on indirect jobs (the supply chain) and
would require a significant amount of data collection by Ex-Im that
would be time consuming, require more technical expertise, and cost
more.
One trade policy researcher we spoke to suggested that Ex-Im could
conduct an assessment of firms that received Ex-Im financing in
comparison to firms that did not receive Ex-Im financing. This
approach, using firm-specific data, could potentially estimate whether
the jobs would have existed without Ex-Im financing. For example, the
German Ministry of Economics and Technology commissioned a study by
the University of Munich on the employment effects of the export
credit guarantees provided by the German export credit agency. This 6-
month study used econometric analysis to examine firm-level data while
taking into account other potential causes of export success and found
that the German export credit agency's guarantees had increased
exports and created jobs. According to their report, their estimate of
jobs created using this approach was comparable to estimates derived
from an input-output approach. However, Ex-Im officials noted that the
type of data used in the German study may not be readily available in
the United States to Ex-Im.
Another trade policy researcher suggested a different approach using
firm-level data from Census or BLS to examine job creation and
destruction over time. This approach could be potentially informative
of changes in the labor market not captured by a total jobs number,
such as whether these are new jobs, or whether firms supported by Ex-
Im are less likely to reduce employment. In contrast, the current
input-output method used by Ex-Im provides a static look at the number
of jobs supported by Ex-Im financing and does not show how the economy
has gained or lost jobs over time. While the approach of using firm-
level data may yield information about the creation and destruction of
jobs, it may not yield a static estimate of the number of jobs
supported. In addition, BLS officials stated that such an analysis
would only identify whether a firm's total employment increased or
decreased over time, but would not identify a new set of jobs in the
firm and would not control for factors other than Ex-Im financing that
could cause a change in employment. An Export Development Canada
official also stated that such a methodology introduces the potential
for selection bias. Furthermore, Commerce officials stated that such
an analysis would be too time consuming to conduct every year.
Two trade policy researchers and Ex-Im and Export Development Canada
officials we spoke with said that these alternative approaches that
rely on firm-level data would require more resources for data
collection and analysis than does Ex-Im's current input-output based
methodology. In particular, a methodology using firm-level data would
require a significant amount of data collection by Ex-Im that would be
time consuming, require more technical expertise, and have a monetary
cost. Moreover, these alternatives may not capture the indirect (the
supply chain) effect of Ex-Im financing. These trade policy
researchers said that the input-output approach is appropriate given
Ex-Im's limited resources and how the agency uses the number of jobs
supported.
Export Development Canada officials said they use an input-output
based approach, which also captures the indirect (the supply chain)
effect, similar to the methodology used by Ex-Im to calculate the
number of jobs supported by its financing.[Footnote 26] However, for
insurance products, Export Development Canada uses the contracts for
the exports it is supporting to calculate the export value. This
approach allows this agency to capture export values that differ from
authorized amounts since the authorized amount could overstate or
understate the actual export value. Ex-Im officials said they lack the
staff and resources to adopt Export Development Canada's method and
that Ex-Im faced some limitations with its data systems. Additionally,
using the authorized value for the short-term insurance products, Ex-
Im officials said, ensures that the value is only counted once in the
fiscal year it was authorized and is not counted again in subsequent
fiscal years.
Prior to the use of the input-output based approach, Ex-Im, as well as
Export Development Canada, tried to collect information on the number
of jobs associated with their financing directly from the companies
that received the financing. Officials from both agencies said that
they had problems with the data they received from the companies. An
official from Export Development Canada also said that smaller
companies found this process burdensome. According to Ex-Im, surveyed
firms responded in inconsistent ways, such as claiming all employed
workers at a firm were supported by the exports. They also reported
that since financial intermediaries or foreign buyers often submit the
applications for Ex-Im financing, they do not know the jobs impact for
the U.S. exporter or service provider. Moreover, any jobs-impact
information from applicants does not account for indirect jobs created
in the supply chain, which the input-output approach does include.
Conclusions:
Ex-Im's primary mission is to support U.S. jobs through the exports
that it finances, and it estimates the number of jobs supported by its
financing in order to provide Congress and the public with a broad
sense of its impact on U.S. employment. The jobs number reported by Ex-
Im is an estimate, used by Ex-Im as an indicator of how the agency is
fulfilling its mission to support U.S. employment. Although the
methodology Ex-Im uses does not distinguish between jobs that were
newly created or jobs that were maintained, its current methodology
has certain advantages. For example, it is based on the input-output
approach commonly used in economic analysis; it includes indirect jobs
in the supply chain; and it can be performed using limited resources.
Providing a precise accounting of the jobs supported by Ex-Im's
financing may not be feasible because of the complexity and cost of
doing so. While trade policy researchers we consulted identified other
methodologies, they also identified limitations of those
methodologies. For example, these methodologies would require more
resources to conduct, would be difficult to perform on a regular
basis, and would not include indirect jobs in the supply chain.
Nonetheless there are important limitations and assumptions that
affect Ex-Im's estimate of the number of jobs supported by its
financing. While Ex-Im's reporting includes a brief overview of its
methodology, it has not included a discussion of the limitations or
fully detailed the assumptions of the methodology and data. The lack
of detailed reporting reduces the ability of congressional and public
stakeholders to fully understand what the jobs number represents and
the extent to which Ex-Im's financing may have affected U.S.
employment.
Recommendation for Executive Action:
To ensure better understanding of its jobs calculation methodology,
the Chairman of Ex-Im Bank should increase transparency by improving
reporting on the assumptions and limitations in the methodology and
data used to calculate the number of jobs Ex-Im supports through its
financing.
Agency Comments and Our Evaluation:
We provided a draft of this report to Ex-Im, Commerce, and Labor for
comment. We also provided relevant sections to Export Development
Canada for technical comment.
In its written comments, which are reproduced in appendix II, Ex-Im
stated that it agrees with GAO's recommendation and will provide
greater detail on the assumptions and limitations associated with its
jobs calculation methodology. Ex-Im further stated that it will begin
implementation of the recommendation this fiscal year with its 2013
annual report, which will include greater information on the
assumptions and limitations of its methodology. Ex-Im will provide
this information in annual reports and on its website.
Commerce stated that it agrees with GAO's recommendation for improved
reporting on how Ex-Im calculates the number of jobs that are
supported by exports for which it provides financing. Commerce also
recommended that Ex-Im make it clear that its jobs estimate is
indicative of jobs supported by Ex-Im financing and is different than
the estimate of jobs supported by total U.S. exports that Commerce
publishes as the official estimate of the U.S. government. Commerce's
comments are reproduced in appendix III.
Export Development Canada stated that it recognizes the deficiencies
in the input-output approach, but that it believes that compared with
other potential methodologies, this approach provides the best
solution. According to Export Development Canada, the input-output
approach uses a simple method to capture the indirect impact of the
supply chain on domestic employment. In addition, Export Development
Canada said that while using firm-level data to estimate the effect of
financing might offer other insights, it would also be complex to
analyze, and could introduce another bias. Further, Export Development
Canada said that in its experience, surveying firms directly may not
lead to reliable information, and also could be burdensome to smaller
firms.
Ex-Im, Commerce, and Export Development Canada also provided technical
comments that were incorporated, as appropriate. We received no
comments from Labor.
We are sending copies of this report to interested congressional
committees, the Chairman of the Export-Import Bank of the United
States, and the Secretaries of Commerce and Labor. In addition, the
report is available at no charge on the GAO website at [hyperlink,
http://www.gao.gov].
Signed by:
Lawrance L. Evans, Jr.
Director, International Affairs and Trade:
[End of section]
Appendix I: Objectives, Scope, and Methodology:
The objectives of this report were to (1) describe the methodology and
processes the Export-Import Bank of the United States (Ex-Im) uses to
calculate the effects of its financing on employment in the United
States, (2) examine the limitations of Ex-Im's approach and how Ex-Im
reports on its methodology, and (3) describe alternative methodologies
and their limitations.
To describe the methodology and processes Ex-Im uses to calculate the
effects of its financing on employment in the United States, we
interviewed Ex-Im staff involved with producing the estimate and
reviewed descriptions of the estimate in the most recent annual
reports and other documentation provided by Ex-Im. Because Ex-Im's
method uses the Bureau of Labor Statistics' (BLS) employment
requirements tables (ERT), we interviewed BLS staff and reviewed
technical documentation on the ERT. In addition, we reviewed the
Microsoft Excel spreadsheet Ex-Im uses to perform the estimate, by
examining formulas in the sheet used to produce the estimate. Because
Ex-Im provided the underlying raw data used by the spreadsheet, we
were able to combine its data with the ERT data and replicate Ex-Im's
jobs estimate by the following steps. First, we downloaded the ERT
directly from the BLS website. Then, we merged the ERT with the raw
data provided by Ex-Im, by industry. Finally, we multiplied the jobs
ratio by Ex-Im data's export value (for the appropriate industry), and
aggregated across transactions. Following this procedure, we obtained
a value close to Ex-Im's exact value for a jobs estimate. Replicating
Ex-Im's estimate helped to verify that Ex-Im followed the process and
used the specific ERT that it stated it did, and that all of the raw
data were reflected in its jobs estimate. We performed our replication
using SAS, a computer program distinct from Excel. Based on our
interviews with knowledgeable agency officials, review of relevant
documentation, and replication of Ex-Im's calculation, we determined
the data were sufficiently reliable for the purposes of our report.
To examine the limitations of Ex-Im's approach, how Ex-Im reports on
its methodology, and alternative methodologies, we reviewed relevant
documentation related to Ex-Im, including recent annual reports,
descriptions of Ex-Im's jobs calculation methodology, and press
releases that included information on jobs supported by Ex-Im
financing. We also reviewed recent GAO reports on Ex-Im and export
credit agencies,[Footnote 27] and literature related to input-output
methodology.[Footnote 28] In addition, we interviewed Ex-Im officials
from various divisions of the organization about how they calculate
the number of jobs supported by Ex-Im's financing, how they obtain
data about Ex-Im's transactions, and how the jobs number is used. We
also interviewed officials from the BLS at the Department of Labor to
discuss the employment requirements tables (ERT). In addition, we
interviewed officials from the Department of Commerce, specifically
from the Bureau of Economic Analysis--which develops the data in the
input-output tables that BLS uses in its ERT--and from the
International Trade Administration--which also calculates the number
of jobs supported by U.S. exports overall. We reviewed relevant
documentation from these agencies such as technical documentation on
the ERT. We also spoke with officials from four other countries'
export credit agencies to obtain information on their efforts to
determine the number of jobs associated with their financing,
including the export credit agencies of Canada, Japan, France, and the
United Kingdom. We selected these countries' export credit agencies
because GAO had consulted with them on prior engagements based on
their similarities to Ex-Im. We obtained information on a study that
analyzed the employment effects of Germany's export credit agency as
an example of an alternative methodology.[Footnote 29] We met with
three selected trade policy researchers to obtain their perspectives
on Ex-Im's methodology and discuss potential alternative methodologies
to calculate the effect of Ex-Im's financing on employment. We
selected these researchers because GAO had consulted with them on
prior engagements related to export credit agencies based on their
knowledge of the issues, or they had been recommended to us through
interviews with knowledgeable government officials due to their
expertise in the area. In addition, we reviewed GAO's Standards for
Internal Control in the Federal Government to assess Ex-Im's
communication regarding its jobs calculation methodology.[Footnote 30]
We conducted this performance audit from August 2012 to May 2013 in
accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe
that the evidence obtained provides a reasonable basis for our
findings and conclusions based on our audit objectives.
[End of section]
Appendix II: Comments from the Export-Import Bank of the United States:
Export-Import Bank of The United States:
811 Vermont Avenue, N.W.
Washington, D.C. 20571:
May 6, 2013:
Lawrance L. Evans, Jr.
Director, International Affairs and Trade:
U.S. Government Accountability Office:
Washington, D.C. 20548:
Dear Mr. Evans:
Thank you for providing the Export-Import Bank with the opportunity to
comment on the subject draft report dated May 2013 regarding the
Bank's job calculation methodology.
Ex-Im Bank's mission is to support U.S. jobs through exports. With
limited staff and resources, the Bank has developed a practical, easy
to use tool that provides an effective approximation of Ex-Im Bank
supported jobs; it utilizes publicly available Commerce Department and
Bureau of Labor Statistics data, and is also used by other agencies to
calculate jobs numbers. We are pleased that the GAO validated the
Bank's jobs calculation methodology and recognizes the advantages of
the Bank's current jobs calculation methodology. The Bank's
methodology is consistent with those commonly used in economic
analysis. The GAO report also recognized that the Bank's current jobs
calculation methodology is appropriate, accurate, and cost effective.
The report does not recommend any changes to the underlying
methodology.
Ex-Im Bank appreciates the GAO's cooperative approach on this audit.
GAO's review and assessment of the Bank's jobs calculation methodology
has been a positive experience for Ex-Im Bank.
The following is GAO's recommendation and Ex-Im Bank's response:
To ensure better understanding of its job calculation methodology, the
Chairman of Ex-Im Bank should increase transparency by improving
reporting on the assumptions and limitations in the methodology and
data it uses to calculate the number of jobs it supports through its
financing.
Ex-Im Bank has been and continues to be committed to openness and
transparency. In the Bank's annual report—which is submitted to
Congress and made publicly available on the Bank's website—we detail
the methodology used to calculate the number of jobs supported by Ex-
Im Bank financing. The Ex-Im Bank agrees with the GAO recommendation
and will provide greater detail on the assumptions and limitations
associated with the jobs calculation methodology in the Bank's Annual
Reports. This information will also be available on the Bank's website.
Ex-Im Bank will implement the GAO recommendation this fiscal year. In
prior annual reports, the Bank detailed the methodology for the jobs
calculation. Starting with the FY 2013 Annual Report, the section on
"Supporting U.S. Jobs" will include greater information on the
assumptions and limitations associated with this methodology. This
information will be consistent with the assumptions and limitations
highlighted in the GAO report.
Sincerely,
Signed by:
John A. McAdams:
Chief Operating Officer:
Export-Import Bank of the United States:
[End of section]
Appendix III: Comments from the Department of Commerce:
United States Department of Commerce:
International Trade Administration:
Washington, D.C. 20230:
Dr. Lawrance L. Evans, Jr.
Director, International Affairs and Trade:
U.S. Government Accountability Office:
Washington, DC 20548:
Dear Dr. Evans:
Thank you for the opportunity to review the draft Government
Accountability Office (GAO) report, Export-Import Bank More Detailed
Information about Its Job Calculation Methodology Could Improve
Transparency (GAO-13-446). In this report, the GAO examined how the
Export-Import Bank calculates the number of jobs that are supported by
exports for which it provides financing.
We generally agree with the GAO recommendation that Export-Import Bank
(Ex-lm) improve its reporting on how it calculates the number of jobs
that are supported by exports for which it provides financing. As part
of its improved reporting, we recommend that Ex-Im make it clear that
its estimate is different than the jobs supported estimates published
by the Department of Commerce where both the methodology and the
numbers themselves are reviewed and approved as official estimates of
the U.S. Government. In so doing, Ex-Im would avoid confusion with the
official DOC estimates that are used government-wide, emphasize that
the number has no general application, and confirm that the figure is
only indicative of jobs supported by Ex-Im financing.
A technical comment is enclosed for your consideration. It is intended
to provide further clarity in how Ex-Im's approach differs from
numbers used government-wide.
We look forward to the final GAO report.
Sincerely,
Signed by:
Praveen Dixit:
Deputy Assistant Secretary for Industry Analysis:
[End of section]
Appendix IV: GAO Contact and Staff Acknowledgments:
Contact:
Lawrance L. Evans, Jr. (202) 512-4802 or EvansL@gao.gov:
Staff Acknowledgments:
In addition to the person named above, Jose Alfredo Gomez (Director),
Juan Gobel (Assistant Director), Christina Werth, Rachel Girshick, and
Benjamin Bolitzer made key contributions to this report. Also
contributing to this report were Karen Deans, Susan Offutt, Martin de
Alteriis, Etana Finkler, Robert Alarapon, and Ernie Jackson.
[End of section]
Footnotes:
[1] Pub. L. No. 112-122, 126 Stat. 350 (May 30, 2012).
[2] GAO, Standards for Internal Control in the Federal Government,
[hyperlink, http://www.gao.gov/products/GAO/AIMD-00-21.3.1]
(Washington, D.C.: November 1999).
[3] 12 USC 635 et seq.
[4] Since fiscal year 2008, Ex-Im has been "self-sustaining" for
appropriations purposes, financing its operations from receipts
collected from its borrowers.
[5] After Ex-Im authorizes a transaction, it issues a loan, loan
guarantee, or insurance policy. The amount actually exported or
shipped as a result of the transaction may differ from the authorized
value of the transaction. Therefore, in fiscal year 2012, Ex-Im
estimated that its authorization of about $35.8 billion would have an
estimated export value of almost $50 billion.
[6] Financing 85 percent of the total value of a transaction is
considered full financing because of the provision under the
Organization for Economic Cooperation and Development arrangement that
export credit agencies can finance only 85 percent of a transaction's
value.
[7] The U.S. content percentage is calculated in different ways
depending on the type of transaction and size of the business. For
short-term transactions involving small businesses, the U.S. content
percentage is based on the total costs (i.e., labor, materials,
overhead, etc.) exclusive of profit. For short-term transactions
involving businesses other than small businesses, the percentage is
based on only the costs of production (i.e., labor and materials). For
medium-and long-term transactions, the content percentage for all
businesses is calculated based on the total price (i.e., total costs
plus profit).
[8] The G-7 comprises Canada, France, Germany, Italy, Japan, the
United Kingdom, and the United States. These countries have been
meeting regularly as a group since the mid-1980s to discuss economic
issues.
[9] The Trade Promotion Coordinating Committee's Working Group on
Analysis and Data brings together experts from key government agencies
who have examined the broader relationship between federal programs
and activities, such as Ex-Im's export financing efforts and the jobs
they support.
[10] The tables are based on historical relationships between industry
inputs (such as labor), and outputs (such as goods for consumption).
BLS then scales these relationships using estimates about labor
productivity (output per person employed) into employment required for
one million dollars of output in that industry (jobs ratios).
Incorporating information on labor productivity is important because
the input-output tables are in terms of total cost, not number of
workers.
[11] For example, "Pharmaceutical and Medicine Manufacturing" supports
3.51 jobs per million dollars of purchases from that industry. In
contrast, "Retail Trade" supports 14.6 jobs per million dollars.
[12] So that the domestic ERT only reflects domestic employment,
international inputs into production are netted out. BLS does this by
assuming that each industry's share of domestic versus international
use of a particular input is constant across industries. For example,
it assumes that the automobile industry uses the same proportion of
imported steel as the construction industry.
[13] The industry relationships are based on the 2002 benchmark BEA
input-output tables (published in 2009). BLS then updates the tables
using annual input-output tables, also obtained from BEA. BLS then
uses productivity measures, which are based on data from surveys of
establishments and households, to translate the cost of labor into
jobs. Ex-Im deflated the 2012 export values to coincide with the 2010
ERT using BEA's price index for exports of goods and services.
[14] According to Ex-Im officials, NAICS code data are used for many
purposes and are part of the Ex-Im data that is reviewed and audited
every year by Ex-Im's external auditor.
[15] Using the underlying transaction data for fiscal year 2012, we
found that in approximately 6 percent of the transactions (by export
value), the NAICS code was missing. In the next section, we discuss
this issue as one of the limitations we identified in the jobs
calculation methodology.
[16] Ex-Im's exporter's certificate, which is used for loans and some
guarantee products, includes representations and certifications
required of the exporter by Ex-Im and the U.S. government, in general.
Ex-Im uses information provided in the certificate, such as net
contract price, to determine the amount and percentage of U.S. content
and to establish the financed amount of each transaction.
[17] This is based on the mix of industries that Ex-Im supports, which
might be different from U.S. exports overall. For example, in a
February 26, 2013 paper, Commerce reported that, in 2011, every
million dollars of U.S. exports supported about 5.1 jobs. The number
of jobs also varies by type of export. Commerce reported that goods
exported from the United States supported 5.6 jobs per million dollars
of goods, while services supported 4.1 jobs per million. Department of
Commerce, International Trade Administration, Jobs Supported by
Exports 2012: An Update, (Washington, D.C.: February 2013).
[18] Department of Labor, Bureau of Labor Statistics and Office of
Occupational Statistics and Employment Projections, Employment
Outlook: 2010-2020: Layout and Description for 195-Order Employment
Requirements Tables: Historical 1993 through 2010 (Washington, D.C.:
February 2012).
[19] BLS officials stated that this is the same concept used in the
domestic monthly payroll employment numbers that BLS produces. This
consistency allows for comparability. For more information see
[hyperlink, http://www.bls.gov/ces/home.htm].
[20] Although it is based primarily on the 2002 BEA benchmark input-
output tables, BLS does update the ERT with the annual BEA tables,
Census data, and other surveys. BLS officials will update the
relationships in the ERT when they obtain the 2007 update from BEA.
Therefore, after the tables are updated, the resulting ERT will have
better data than what is currently available. Using the updated ERT
could result in slightly different figures from calculations performed
using the current ERT.
[21] Of export credit agencies we contacted, only Export Development
Canada calculates the effects of its financing on employment.
Officials from the French, British, and Japanese export credit
agencies said that their agencies do not perform this type of
calculation.
[22] The average jobs ratio that Ex-Im uses is 6.5 jobs per million
dollars of exports. However, if the actual ratio was plus or minus 5,
this would translate into plus or minus 12.5 thousand jobs (since 6
percent is approximately 2.5 billion dollars).
[23] Department of Commerce, International Trade Administration,
Exports Support American Jobs: Updated Measure Will Quantify Progress
As Global Economy Recovers (Washington, D.C.: Undated).
[24] According to Ex-Im officials, the Board of Directors reviews all
long-term transactions and generally other transactions over $10
million in authorization value. The board also receives the results of
an economic impact analysis that assesses whether a project will
negatively affect the U.S. economy.
[25] GAO, Standards for Internal Control in the Federal Government,
[hyperlink, http://www.gao.gov/products/GAO/AIMD-00-21.3.1]
(Washington, D.C.: November 1999).
[26] Export Development Canada's mission is not directly focused on
creating Canadian jobs, unlike Ex-Im's mission to support U.S. jobs
through exports. Furthermore, Export Development Canada has a
commercial market orientation and is not restricted from competing
with the private sector. In contrast, Ex-Im's charter emphasizes its
role as a lender of last resort.
[27] GAO, U.S. Export-Import Bank: Actions Needed to Promote
Competitiveness and International Cooperation, [hyperlink,
http://www.gao.gov/products/GAO-12-294] (Washington, D.C.: Feb. 7,
2012); GAO, Export-Import Bank: Improvements Needed in Assessment of
Economic Impact, [hyperlink, http://www.gao.gov/products/GAO-07-1071]
(Washington, D.C.: Sept. 12, 2007).
[28] Department of Commerce, Bureau of Economic Analysis, Measuring
the Nation's Economy: An Industry Perspective: A Primer on BEA's
Industry Accounts (Washington, D.C.: May 2011); Ronald E. Miller and
Peter D. Blair, Input-Output Analysis: Foundations and Extensions (New
Jersey: 1985); Wassily Leontief, Input-Output Economics (New York:
1966).
[29] Ifo Institute, Leibniz Institute for Economics Research,
University of Munich, Employment Effects of Export Credit Guarantees
by the Federal Republic of Germany "Hermesdeckungen" (Munich: October
2011).
[30] GAO, Standards for Internal Control in the Federal Government,
[hyperlink, http://www.gao.gov/products/GAO/AIMD-00-21.3.1]
(Washington, D.C.: November 1999).
[End of section]
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