How does air transport impact employment in typical tourist industry activities in Brazil?

Abstract

This paper examines the impact of air transport on tourism-related employment in Brazil, one of the largest economies of the world, where both industries are operating well below their potential. Job creation in typical tourist industry activities in response to innovations in passenger air transport is a paramount indicator for both the tourism and air transport industries. The discussion here is supported by the time series analysis and Granger causality methodologies. The results show that air transport activity cointegrates with employment in tourism and has substantial impact on both its long-and short-term composition.Although employment shows higher elasticity to international than to domestic air movement, the latter is considered the main driver of employment. In three years, the accumulated potential response by employment in tourism to innovations in domestic air transport was 50% and accumulated percentage variance, 56%. The results indicate that Brazilian policymakers must consider domestic air transport as a key factor for sustainable employment in the tourism industry.