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Localized Effects Of CaliforniaS Military Base Realignments: Evidence From Multi-Sector Longitudinal Microdata

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  • C J Krizan

Abstract

Cuts in U.S. Department of Defense budgets have led to changes in the personnel levels at military bases throughout the United States. Because these bases are often significant sources of civilian and military employment and also provide customers for local businesses, closing them distresses local citizens, business leaders and politicians. In, Defense Secretary William Cohen launched a new drive to close dozens more military bases. Given the timeliness and magnitude of these actions, and in light of the predictions of hardship surrounding them, it is important to realistically assess the impact of substantial personnel changes at military bases on employment at neighboring businesses. This study utilizes a new and uniquely well-suited confidential dataset to analyze this issue at the level closures' impact are thought to occur: individual establishments and their employees. Using an establishment-level panel dataset that covers all private establishments in California with positive employment from 1989 to 1996, I examine how the employment dynamics of establishments across the full spectrum of industries are affected by personnel changes at nearby military bases and find that despite establishments' growth rates declining, more establishments going out of business and fewer new ones starting, when bases close workers' employment prospects actually improve.

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File URL: ftp://ftp2.census.gov/ces/wp/1998/CES-WP-98-19.pdf
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Bibliographic Info

Paper provided by Center for Economic Studies, U.S. Census Bureau in its series Working Papers with number 98-19.

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Date of creation: Dec 1998
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Handle: RePEc:cen:wpaper:98-19

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Keywords: CES; economic; research; micro; data; microdata; chief; economist;

References

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  1. Lucia Foster & John Haltiwanger & C.J. Krizan, 1998. "Aggregate Productivity Growth: Lessons from Microeconomic Evidence," NBER Working Papers 6803, National Bureau of Economic Research, Inc.
  2. Caballero, R.J. & Hammour, M.L., 1991. "The Cleansing Effect of Recessions," Discussion Papers 1991_59, Columbia University, Department of Economics.
  3. Steven J. Davis & John C. Haltiwanger & Scott Schuh, 1998. "Job Creation and Destruction," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262540932, December.
  4. John Haltiwanger & Russell Cooper & Laura Power, 1999. "Machine Replacement and the Business Cycle: Lumps and Bumps," American Economic Review, American Economic Association, vol. 89(4), pages 921-946, September.
  5. Steven J. Davis & Prakash Lougani & Ramamohan Mahidhara, 1997. "Regional Labor Fluctuations: Oil Shocks, Military Spending, and Other Driving Forces," JCPR Working Papers 4, Northwestern University/University of Chicago Joint Center for Poverty Research.
  6. Campbell, J.R., 1995. "Entry, Exit, Technology, and Business Cycles," RCER Working Papers 407, University of Rochester - Center for Economic Research (RCER).
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Cited by:
  1. Mark A. Hooker & Michael M. Knetter, 1999. "Measuring the Economic Effects of Military Base Closures," NBER Working Papers 6941, National Bureau of Economic Research, Inc.
  2. Ron Jarmin, 1999. "Government Technical Assistance Programs* And Plant Survival: The Role Of Plant Ownership Type," Working Papers 99-2, Center for Economic Studies, U.S. Census Bureau.

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