CARD Study Analyzes Factors Behind County Economic Growth

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Rural amenities, state and local tax burdens, population, amount of primary agriculture activity, and demographics—new research at the Center for Agricultural and Rural Development (CARD) shows that these factors have the largest impact on county economic growth. The analysis used economic growth models and data from 734 counties in Minnesota, Wisconsin, Illinois, Iowa, Missouri, Kansas, Nebraska, and South Dakota. The research also used geographical information systems (GIS) software to map growth spots in these states. The study found that counties with a heavy agricultural presence have not fared as well as less agriculturally dependent counties, although counties that have increased their value-added agriculture, measured as growth in livestock sales receipts, enjoyed additional economic growth. Also, increased livestock production must be weighed against availability of recreational amenities, which are a significant growth factor and may become even more important as the demand for outdoor recreation grows with growing incomes, leisure time, and population. Counties with an older population experienced slower economic growth, further eroding tax bases and services. Higher local tax burdens had a negative impact on growth, and while local tax burdens can be reduced, this will affect the level of local services. Further, the researchers found that higher local government salaries relative to a county's population had a negative effect on county growth. Counties can reduce costs through consolidation, reorganization, and regionalization of services, but while this will save money, it will also reduce local employment opportunities. For more information, see "An Analysis of Regional Economic Growth in the U.S. Midwest," available on the CARD Web site. Contact Bruce Babcock, (515) 294-6785, or Sandy Clarke, CARD communications, (515) 294-6257.

(Released April 2005)