ABSTRACT
The interrelationships among industries make all industries sensitive to changes in defense purchases. However, some industries, such as those that manufacture arms and ammunition, are clearly more dependent on defense purchases than others. Therefore, employment is more sensitive to changes in defense spending in some industries than in other industries. Further, given the variation in sensitivity to defense purchases among industries and the variation in industry composition among the states, one would expect to find that the impact of changes in defense purchases on employment varies greatly from state to state.
