Tourism and Development

undertaken to evaluate the industry’s second- and third-order economic impacts. From a first-order, aggregate perspective the impacts appear beneficial, but from the resident popu-lations ’ perspective the effects are more questionable. While total income and job growth occur, they correspond with other nonimproving social welfare indicators. Thus, tourism, as a tool for development, has limitations and needs to be managed to serve as a more beneficial agent of change. Although tourism has become a conspicuously large and fast-growing industry, economic analysis of it has been some-what limited, possibly because tourism is not a single indus-try but rather comprises businesses from numerous industrial classifications. Economists also tend to prefer manufacturing as a topic of analysis, and tourism can be easily dismissed as a low-wage service industry. Existing studies frequently take the form of multiplier analyses that elaborate on aggregate levels of income and employment. Evaluating tourism through its first-order effects on income and employment growth is only one approach, how-ever, and this approach fails to address many of the more con-sequential aspects of the industry. Specifically, the first-order effects offer limited information because the distributional consequences are ignored. A more thorough approach, such as that offered in this article, involves an evaluation of social welfare indicators in tourism-dominated economies. Income and job growth data provide aggregate measures of economic well-being but fail to address in specific detail how the tourist industry/economy affects the community of which it is an integral part. This article focuses on labor force participa-tion rates, proprietary income, unemployment rates, levels of poverty, participation in welfare programs, educational attain-ment, wages by industry, and public finances as measures of the indirect consequences of tourist development. The article presents a case study of the gateway com