Rural amenities, state and local tax burdens, population, amount of primary agriculture activity and demographics - these factors have the largest impact on county economic growth, according to new research from the Center for Agricultural and Rural Development.
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 software to map growth spots in those states.
The study found that counties with a heavy agricultural presence haven’t fared as well as less agriculturally dependent counties, although counties that 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. These are a significant growth factor and may become even more important as the demand for outdoor recreation increases 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; although 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 also will reduce local employment opportunities.
For more information, see "An Analysis of Regional Economic Growth in the U.S. Midwest," available at http://www.card.iastate.edu. Contact Bruce Babcock, CARD, (515) 294-6785; or Sandy Clarke, CARD communications, (515) 294-6257.
Iowa State University