ABSTRACT
The relative contribution of agriculture to the U.S. Midwest economy continues its century-long decline. The continuing development of ever-larger machinery, new biotech crops, and other labor-saving technologies has greatly decreased the need for people in rural areas that have traditionally depended on agriculture. The last century has brought significant changes to the U.S. Midwest. Many rural counties have come to grips with the reality that, given the current situation and the outlook for primary agricultural production, the future is not very attractive from a long-term growth perspective. While it is obvious that the adoption of new agricultural practices, machinery, and knowledge and information technologies has led to less-expensive food and nonfood goods for the American consumer, it is also true that the cost of adopting these technologies has been borne by rural communities, particularly in the Midwest. Some rural counties in the Midwest were able to offset the loss of agricultural production and marketing jobs in the last half century by bolstering local economies through manufacturing and service activities. As outsourcing production and jobs to other countries continues, such business and job opportunities are increasingly more difficult to secure. However, there are other less-traditional actions that policymakers can take to foster economic growth. In this chapter, we explore a range of factors hypothesized to influence total county income (TCI) growth. Other studies of county economic growth, including those focusing on rural counties, have examined a combination of indicators including population, employment, and per capita income (PCI) growth (Carlino and Mills; Khan et al.; Deller et al.; and Huang et al.). However, to our knowledge, little if any analysis has been directed to explaining aggregate measures of economic welfare such as TCI where the total size of economic pie is at issue. An exception is Kusmin et al. and Aldrich and Kusmin, in which total county earnings growth, ultimately a combination of wage and employment growth, is the variable of interest. TCI is arguably a broader measure of aggregate county welfare since the issues faced by local legislators, property tax rates, and provision of public goods, for example, are largely concerned with the general populace. In this largely datadriven endeavor, we explore various demographic, economic, agricultural, amenity, and local government and state fiscal variables that have been used to explain rural
economic growth in both formal models and policy discussions. Our study examines economic growth in the Midwest from 1990 to 2001 in a cross-section of 787 counties in Minnesota, Wisconsin, Illinois, Iowa, Missouri, Kansas, Nebraska, North Dakota, and South Dakota.
