This thesis examined the relationship between basic employment and derived employment for the Muncie Standard Metropolitan Statistical Area. The study also presented graphically, by use of monthly time series data from 1965 to 1972, employment growth patterns by industrial group. A conceptual model was developed relating the contributions of, basic employment to the growth of derived employment. The model also related the lagged, primary -secondary, and wage scale effects of basic employment upon derived employment. The model assumed that the earnings off workers in basic employment is a major determinant of derived employment growth. Total monthly earnings for each industrial group were specified as explanatory variables in a series of multiple regression equations to determine the various basic industries' contributions to the growth of derived employment. Five-year derived employment projections were computed assuming various growth rates in earnings for each of the significant basic industries. The study concluded that the growth of Ball State University employment (basic government) was the most significant factor effecting the growth of derived employment in the Muncie Standard Metropolitan Statistical Area.