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Meat Packing and Processing Facilities in the Non-Metropolitan Midwest: Blessing or Curse?

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  • Artz, Georgeanne M.
  • Orazem, Peter F.
  • Otto, Daniel M.

Abstract

Growth in the meat packing and processing industry in the Midwestern United States has generated a significant amount of debate regarding the costs and benefits of this type of economic development. This research employs 1990-2000 proprietary data from the Bureau of Labor Statistics'’ Longitudinal Database (LDB) to investigate the effects of this industry on social and economic outcomes in non-metropolitan counties of twelve Midwestern states. The empirical specification uses a difference-in-differences specification to measure the effect of industry growth on local economic growth, government expenditures, and crime. Propensity score matching is used as a check on possible non-random placement of meat packing and processing plants. Results suggest that as the meat packing industry’'s share of a country’'s total employment and wage bill rises, total employment growth increases. However, employment growth in other sectors slows, as does local wage growth. There is some evidence that slower wage growth swamps the employment growth so that aggregate income grows more slowly. We find no evidence that growth in the industry changes the growth rates for crime or government spending.

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Bibliographic Info

Paper provided by American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) in its series 2005 Annual meeting, July 24-27, Providence, RI with number 19242.

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Date of creation: 2005
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Handle: RePEc:ags:aaea05:19242

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Keywords: Community/Rural/Urban Development;

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  1. Joshua Angrist & Alan Krueger, 1998. "Empirical Strategies in Labor Economics," Working papers 98-7, Massachusetts Institute of Technology (MIT), Department of Economics.
  2. Glaeser, Edward Ludwig & Kallal, Hedi D. & Scheinkman, Jose A. & Shleifer, Andrei, 1992. "Growth in Cities," Scholarly Articles 3451309, Harvard University Department of Economics.
  3. Moretti, Enrico, 2004. "Bidding for Industrial Plants: Does Winning a 'Million Dollar Plant' Increase Welfare?," Santa Cruz Department of Economics, Working Paper Series qt5cz0h23t, Department of Economics, UC Santa Cruz.
  4. Kelly D. Edmiston, 2004. "The Net Effects of Large Plant Locations and Expansions on County Employment," Journal of Regional Science, Wiley Blackwell, vol. 44(2), pages 289-320.
  5. William F. Fox & Matthew N. Murray, 2004. "Do Economic Effects Justify the Use of Fiscal Incentives?," Southern Economic Journal, Southern Economic Association, vol. 71(1), pages 78-92, July.
  6. Julie L. Hotchkiss & Robert E. Moore & Stephanie M. Zobay, 2003. "Impact of the 1996 Summer Olympic Games on Employment and Wages in Georgia," Southern Economic Journal, Southern Economic Association, vol. 69(3), pages 691-704, January.
  7. Hotchkiss, Julie L. & Moore, Robert E. & Zobay, Stephanie M., 2002. "The impact of the 1996 Summer Olympic Games on employment and wages in Georgia," MPRA Paper 9328, University Library of Munich, Germany.
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