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Employment Approximately 3.5 million people are employed in the Basin economy. The largest single employment sector is the public sector (includes all levels of government), which accounts for 16.9 percent of total employment. The combined manufacturing sector is only slightly behind the public sector, with 15.4 percent of total employment within the Colorado River Basin States. The recreation services sector is also a very significant part of total employment at 10.5 percent. The electric power production sector is around 0.5 percent of the total employment. Combined agricultural employment is approximately 4.3 percent of total employment (the livestock feed sector is 0.19 percent of employment, and the other crops sector is approximately 0.17 percent of employment). The petroleum and gas production sector accounts for about 0.2 percent of total employment. Historical Development of the Basin The rapid urbanization of the Basin has had a significant effect on the endangered fishes. This is reflected in the fraction of the population living in urban areas in 1990 as compared with this fraction in 1950. With the exception of California, this fraction was in the 50-65 percent range in 1950 and is now in the 65-90 percent range. The major consequence has been a significant increase in the use of water and electric power. MODELING OVERVIEW Two types of economic effects are of interest when considering the economic impacts of critical habitat designations: regional economic impacts and national economic efficiency impacts. Regional economic impacts refer to the impact of the proposed critical habitat designations on specific geographic regions, such as States or other sub-regions of the country. Frequently, regional economic impacts effect a transfer of resources from one region to another. For example, if one State in the Basin increases its consumptive use of Colorado River water, another State may have to forego some of its use of Colorado River water. Thus, a positive regional impact to one State can be a negative impact to another, and vice versa. Regional economic impacts in this study were analyzed using input-output models which organize the basic accounting relationships that describe the production sector of the economy. The input-output method starts with the assumption that all sectors of the economy are tied together by virtue of economic relations called linkages, and the production of a good or service can be described by a recipe whose ingredients are the outputs of the other sectors of the economy. The primary inputs are labor, capital, and other raw resources. Through its multiplier analysis, the input-output model is capable of generating estimates of the changes in output for sectors, changes in employment, and changes in income due to species listing and proposed critical habitat designation. The models report the total impacts that result from the interactions among the sectors of the economy. 20