Real estate returns and employment growth rates over the 1983-1997 period for forty-six major MSAs are used to examine the relationship between employment growth and real estate return. The results suggest: (1) Employment growth contributes to real estate return only in the short term. There is no relationship between expected return and employment growth over the long term (e.g., ten years). Employment growth, however, tends to reduce return [correlation relative to the baseline] and return volatility. (2) Employment [correlation relative to the baseline] and volatility are positively linked, respectively, to return beta and volatility. (3) Both employment [correlation] and return [correlation] are priced in the marketplace, that is, a [stronger correlation] is likely to be associated with a higher expected return. To investors, this study confirms the validity of employment analysis for investment decision making because employment growth characteristics are related to return characteristics. Investors, however, are cautioned against aggressively pricing employment growth into their ten-year IRRs, especially for a long-term investment.