THE 1987 STOCK MARKET CRASH AND NEW YORK CITY EMPLOYMENT: AN INTERVENTION-MULTIPLIER ANALYSIS*

ABSTRACT. Intervention analysis is used to assess the impact of the October 1987 stock market crash upon employment in the securities industry in New York City. The results indicate that the crash has led to a gradual, but permanent reduction of approximately 25,000 jobs in this industry through July 1990. Using a dynamic location quotient methodology to measure basic employment, an estimate of a partial-adjustment economic base multiplier suggests that total New York City employment is likely to decline by over 100,000 as a result of the crash and subsequent adjustments in the securities industry.