Changing Employment Profiles and Growth: An Economic Base Study of Florida Counties (1982–1987)

Location Quotients are used to estimate economic base multipliers for two-digit Standard Industrial Classification employment data at the county level for the state of Florida. Changes in multipliers are contrasted to changes in county employment profiles and demographic trends for the period 1982 to 1987. Counties are then classified by employment and growth characteristics. A cross-sectional econometric model is constructed to explain regional shifts in total employment. It is demonstrated that although the Florida economy is supported by a low level of employment activity in primary and secondary sectors (relative to the tertiary sector), these sectors tend to be very important in explaining variations in regional economic growth. The empirical findings suggest that the alleged service-oriented economy of Florida is still reliant upon export-oriented activity as the catalyst for employment expansion.     

On the Value of Homotheticity in the Shift-Share Framework

The purpose of this paper is to examine the usefulness of homothetic reformulations of the shift-share accounting model to the practitioner of regional growth studies. The reformulations of Esteban-Marquillas (1972) and Arcelus (1984) are examined to determine if they improve the shift-share framework as a means for accounting for regional economic growth or decline. The purpose of the homothetic models is to separate out change in a region's employment (or value added) associated with its prior or base year specialization in particular industries from change associated with changes in the mix of industries that occurred during the period under study. It is contended while the resulting accounts may help in understanding individual industry's growth rates, they shed little light on total regional growth. Indiana employment data from 1977 and 1986 are used to illustrate the arguments.     

Alternative Labor Market Closures in a Regional Model

Five versions of a regional economic forecasting and simulation model are implemented to evaluate the forecasting accuracy and significance for impact analysis of alternative regional labor market closures. The five versions correspond to the following specifications: downward-sloped labor demand and upward-sloped labor supply, vertical labor demand and upward-sloped labor supply, an input-output version, and two general equilibrium configurations of labor demand and supply. It is found that the estimated impacts of an exogenous employment stimulus differ greatly across the model versions. Also, post-sample forecasts for 1981-1988 are run for the fifty states plus Washington D.C. with each model version to test their relative forecast accuracy. The forecast comparison shows that the general equilibrium version that specifies inelastic supply is inferior to the other versions for short-term forecasts of wage rates and long-term employment forecasts. For both short- and long-run population forecasts, the versions with completely immobile labor are more accurate than those with completely mobile labor. However, versions that specify an upward-sloped labor supply (partial labor supply adjustment) are the most accurate.     

Integrating Firm Dynamics into the Shift‐Share Framework

ABSTRACT This article integrates firm birth and death data into a shift‐share analysis framework. The proposed methodology can be used when data availability does not allow for the direct association of employment changes to business demographics at the regional level. It may be also used as an exploratory step before any explanatory econometric work is undertaken as a means of identifying classes of potential control variables. Applying the method to Greek data suggests that firm‐size heterogeneity should not be ignored, that local conditions matter more than regional economic structure, and that the latter are asymmetrical across sectors when it comes to the effects of business demographics on regional employment or output growth.     

Spatial Patterns in the Economic Development of the Mountain West

ABSTRACT Many counties in the mountainous areas of the western U.S. are experiencing rapid growth in population and income, even though extractive industries that served historically as their primary economic base are in decline. The purpose of this paper is to establish statistically the spatial determinants of population, employment, and income densities in 86 rural mountain counties and any changes in those determinants between 1985 and 1994. The results of this analysis indicate that densities are oriented to regional metropolitan centers and critical amenities such as ski areas, national parks, and universities or colleges. Negatively sloped density gradients with respect to distance from regional metropolitan centers suggest that the densities of settlement patterns beyond metropolitan boundaries are analogous to those within metropolitan areas relative to urban centers. In short, a tension apparently exists in locational choice; residents of the Mountain West desire to live near the beauties and amenities of the mountain landscape but do not want to entirely sever their urban ties. Because amenities are the primary attraction of mountain counties rather than employment in locationally dependent industries, at least some migrants must have relatively footloose forms of income.     

Covariance Risk and Employment Growth in Canadian Cities

ABSTRACT The Capital Asset Pricing Model is used to examine the relationship between covariance risk in employment and growth in employment for Canadian census metropolitan areas. A new version of location quotient (LQ) is presented that is based on covariance risk. This risk quotient is shown to be a better predictor of employment growth than the simple LQ. The portfolio theoretic model and covariance risk are shown to be useful in predicting growth in addition to studying the regional stability of employment.     

Dynamic Shift-Share Analysis

Most applications of shift-share analysis to regional employment change have used a study period of several years and have examined conditions only at the beginning and end years. This comparative static approach does not take into account the continuous changes in both industrial mix and size of total employment of the region over the study period. Calculating the national growth effect, the industrial mix effect, and the competitive effect on an annual basis and then summing the results over the study period provides a more accurate allocation of job changes among the three shift-share effects. This approach, which we term dynamic shift-share analysis, also allows unusual years and years of economic transition to he identified. We illustrate the use of dynamic shift-share by presenting results of an analysis of New England employment growth from 1939 to 1984, using U.S. Bureau of Labor Statistics data. The use of the dynamic form of shift-share is important when the study period is characterized by either large changes in regional industrial mix or major differences between regional and national growth rates.     

Using Economic Base Models to Explain New Trends in Rural Income

The economics or urban and rural areas in the United States continue to experience change in their structure, leading to changes in their economic base. This paper argues that nontraditional sources of income, employment, and business activity have become more important in the economic base of rural areas. Current trends in rural parts of the western United States are used to document this argument. In spite of the decline in the relative or absolute important of traditional natural-resource-oriented industries in the rural West, in the 1990s this region is experiencing population growth rates well above those of the nation as whole. This reversal of development experience from the 1990s is analyzed empirically, and extended economic base models are proposed to capture forces which now are found to be of growing significance in explaining current development trends in western rural economics.     

Rapid Metropolitan Growth and Community Disparities

Does rapid growth in a metropolitan area amplify or reduce disparities among its differentiated communities? Theoretical economic and political arguments can support both tendencies but lean in the direction of greater differentiation and disparities following a period of rapid regional growth. This article examines uneven population, employment and tax base growth as both causes and consequences of economic and social disparities. The analysis posits that growth bypasses the built-up and lowest income communities in favor of the more distant middle-income suburbs with extensive land for development. The implications of these uneven growth patterns are widening inter-municipal disparities consistent with growth rates. The analysis is carried out for the 365 contiguous jurisdictions in northern New Jersey, a region that experienced modest growth in the 1970s and rapid growth in the 1980s. The findings confirm the uneven pattern of growth and widening disparities during the growth spurt of the 1980s.     

Spatial Clusters in EU Productivity Growth

In the last year, a central issue in regional economic growth debate has been represented by the empirical analysis of Verdoorn's law related to the long‐term dynamic relationship between the rate of growth in output and the productivity growth due to increasing returns. Several papers have tested Verdoorn's law on European countries as well as many other world economies. Recently, attempts have been made to provide foundations for a spatial version of the original law specification. The main contributions were dedicated to the inclusion of spatial dependence in the economic model. Surprisingly, in the literature on Verdoom's law the analysis of the spatial heterogeneity is not often considered. The aim of this paper is the regional analysis of the spatial dependence and heterogeneity in Verdoorn's law, identifying spatial regimes that can be interpreted as clusters of productivity growth in European regions at NUTS 2 level. To pursue this objective, an optimization algorithm for the identification of groups is used. This constitutes a modified version of Simulated Annealing.     

The elusive quest for balanced regional growth from Barlow to Brexit: Lessons from partitioning regional employment growth in Great Britain

The British Government’s economic strategy for post‐Brexit Britain of achieving balanced regional growth by “driving growth across the whole country” echoes the objectives set by the Barlow Report of 1940. The regional policies that followed the Barlow Report were heavily influenced by papers written for the Commission by G D A (later Sir Donald) MacDougall. The first of these papers was included as an appendix to the report itself and introduced the shift‐share methodology to the analysis of regional employment growth, and subsequently shown to be flawed. The second paper considered the urban hierarchy and growth but was never fully developed. Consequently post‐war regional policy focussed on the contribution of industrial structure to employment growth without fully taking into account the urban hierarchy or regional locations of that employment. This article replaces the flawed shift‐share methodology with multifactor partitioning (MFP) and applies it to regional employment growth for the period 1971‐2012, a span of special interest because it largely coincides with British membership of the European Union (EU). The deficiencies in the second paper are addressed by introducing allometry to measure the employment growth of each region relative to that of Great Britain and then regression analysis to relate the allometries to distance from London. The results of the two sets of analyses highlight the need for a multiple‐factor, comprehensive, and integrated approach to regional policy and provide a benchmark against which to gauge the success of Britain's post‐Brexit policy of driving future growth across the whole country.     

Modelling Local and Regional Economic Development in Turkey: A “Curate's Egg”

This paper explores and unpacks the nature of the processes shaping regional economic growth in Turkey using an econometric modelling strategy. Existing empirical research in this field has focussed on regions in economically advanced and technologically innovative economies. As a consequence, the broader picture of the dynamics of regional development in less developed countries, particularly its social and political origins and the overall changes in regional inequality, has remained elusive and less clear. In this study, a set of econometric models is developed to explore the validity of a range of theoretical propositions in explaining the trajectories of regional economic change in Turkey between 2004 and 2008. Growth is calibrated in terms of employment and changing rates of unemployment in the chosen time period in the 81 provinces of Turkey. The results of the study explain that implications of the current local and regional economic development theories are a “Curate's Egg”—good in parts—because these theories are only partially relevant in the Turkish context.     

Natural Amenities and Rural Development: Understanding Spatial and Distributional Attributes

ABSTRACT Contemporary resource management practice and rural development planning increasingly emphasize the integration of resource extractive industries with non‐market‐based recreational and amenity values. There is a growing empirical literature which suggests that natural amenities impact regional economies through aggregate measures of economic performance such as population, income, and/or employment growth, and housing development. We maintain that assessing the developmental aspects of amenity‐led regional change requires a more thorough focus on alternative measures of economic performance such as income distribution and spatial organization. In the applied research presented here we investigate relationships between amenities and regional economic development indicators. Results suggest mixed and generally insignificant amenity‐based associations which highlight the need for appropriate regional economic modeling techniques that account for often dramatic spatial autocorrelation of natural amenity attributes. We conclude that with respect to amenity driven economic growth and development “place in space” matters.     

Jobs,Houses, and Trees: Changing Regional Structure,Local Land‐Use Patterns,and Forest Cover in Southern Indiana

Land‐use and ‐cover change is a topic of increasing concern as interest in forest and agricultural land preservation grows. Urban and residential land use is quickly replacing extractive land use in southern Indiana. The interaction between land quality and urban growth pressures is also causing secondary forest growth and forest clearing to occur jointly in a complex spatial pattern. It is argued that similar processes fuel the abandonment of agricultural land leading to private forest regrowth, changes in topography and land quality, and declining real farm product prices. However, the impact of urban growth and development on forests depends more strongly on changes in both the residential housing and labor markets. Using location quotient analysis of aggregate employment patterns, and the relationship between regional labor market changes, the extent of private forest cover was examined from 1967 to 1998. Then an econometric model of land‐use shares in forty southern Indiana counties was developed based on the net benefits to agriculture, forestland, and urban uses. To test the need to control explicitly for changes in residential demand and regional economic structure, a series of nested models was estimated. Some evidence was found that changing agricultural profitability is leading to private forest regrowth. It was also uncovered that the ratio of urban to forest land uses is better explained by incorporating measures of residential land value and industrial concentration than simply considering population density alone.     

An Alternative to Aggregated Base Tables in Input-Output Table Regionalization

Analysts faced with the challenge of constructing a regional input-output table from partial or nonsurvey-based data typically adapt a national input-output table to reflect the regional economic structure. Detailed benchmark input-output tables with more than 500 industry sectors are compiled for years at five-year intervals, but are many years out of date by the time they are released. Annual updates are compiled for intervening years, but detail only 85 industry sectors. Analysts therefore must choose between the currency of the data and its detail in the national table that serves as the reference. This paper presents a table disaggregation and adjustment (TDA) method for combining the information from the detailed benchmark tables with the more current but aggregated data. Empirical tests demonstrate that the TDA method generates base data that analytically outperform the aggregated annual update data.     

Regional Growth Dynamics in the Service Sector: The Determinants of Employment Change in UK Regions, 1971–2005

There is a need to better understand the dynamics relating to the evolving economic structure of regions, in particular factors concerning deindustrialisation and the growth of services. In order to unpick the dynamics relating to contemporary regional evolution, this paper examines regional employment in the UK's services sectors from 1971 to 2005. The analysis utilises the statistical technique of multi‐factor partitioning to examine the evolutionary dynamics of employment change in the UK service sector. Overall, differing growth trajectories in services employment across regions appear to be the result of the different underlying industrial structures observed within the regions themselves. The findings indicate that the industrial structure of a region has a significant influence on employment change in services, with related variety being of greater consequence than specialisation. This suggests that diversity, or urbanisation, effects have a greater influence than specialisation effects on “lighter” industries than “heavier” industries. Spatio‐temporal variations within the development of services are evident in the analysis, and there is evidence of convergence across the regions for all sub‐sectors examined. It concludes that in an increasingly services‐dominated economy, diversity and related variety have some weight in explaining regional development paths.     

Global Markets and the Role of Geographical Proximity in Mexico's Employment Growth

In the context of greater economic integration with global markets and structural economic reforms, this paper analyses regional and sectoral employment growth dynamics in Mexican states between 2004 and 2014. The methodology is based on spatial shift‐share analysis that explicitly considers interregional interactions in employment while assessing potential spillover effects arising from spatial interactions among states and industrial sectors. The results suggest a competitive effect from some industries—such as those related to science and specialized suppliers, intensive scale industries and dominated providers—which led to the formation of industrial corridors of neighboring states that connect the central region with the northeast region of the country. It was also found that proximity to states such as Nuevo Leon, Queretaro, Guanajuato, San Luis Potosi, and Puebla has positively influenced neighboring states in terms of employment growth rates. The results also support the argument of some sort of de‐concentration of economic activity in the capital, Mexico City, toward neighboring states.     

The Dynamic Effects of Entrepreneurship on Regional Economic Growth: Evidence from Canada

Facilitating entrepreneurship to address regional income disparity continues to be a major concern of policy makers across the globe. This study explores the temporal pattern of income disparity for Canadian provinces in two estimation steps. First, an econometric growth regression model is applied to identify the impact of entrepreneurship on regional economic growth. The estimation results suggest that entrepreneurship, measured in terms of the self‐employment rate, plays a pivotal role in determining regional development in Canada. Second, a dynamic vector autoregression model is employed to simulate long‐run regional growth effects that result from policy shocks affecting entrepreneurship. Compared to other growth drivers, entrepreneurship is found to have more pronounced and long‐term stimulative effects on regional development for the period of 1987–2007.     

Servicing Our Economy: Producer Service Location and Government Procurement 2004–2010 in the Washington DC Metropolitan Area

Harrington and Campbell (1997) previously illuminated the pattern of producer services' suburbanization in the Washington, D.C., metropolitan area between 1970 and 1992. Their results showed producer services growing at a faster rate at locations farther from the central city. We revisit the topic utilizing data from 2004 to 2010, assessing not only changes in the distribution of producer services since their work, but also the impact of massive increases in defense spending on producer services' growth throughout the first decade of the twenty‐first century. Multivariate linear regression is used to estimate per capita growth of producer services employment using six independent variables. Our results reveal producer services employment during the time period has grown significantly more quickly in the urban D.C. core than the outer suburbs, contrary to Harrington and Campbell's research. Additionally, we find per capita producer services employment is self‐limiting over the study period: locations with more producer services employment in 2004 experienced significantly less producer services growth over the period. We find federal procurement has no correlation on producer services overall, with limited effects on some subsectors. Analyzing a select group of producer services subsectors revealed that no sectors followed the overall model exactly, suggesting that targeting producer services for growth must be done carefully. None of our models show employment diversity to be a factor in differentiating economic growth at the intra‐metropolitan level.