Tourism and Employment Spillovers in a Small Island Developing State: A Dynamic Investigation

Abstract

Using a dynamic vector error correction model, and catering for dynamism and endogeneity, the present study attempts to address the question on whether tourism development enhances employment in Mauritius using time series data for the period 1988-2014. The results show that indeed tourism expansion has contributed towards boosting direct, indirect and induced employment in both the long run and short run. The findings also demonstrate that investment in the tourism sector positively influences the employment variable. Moreover, a uni-directional causality is found in the investigation running from tourism development to employment creation as a result of the expansion of the tourism sector.