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The Effect of Casinos on Local Labor Markets: A County Level Analysis


  • Chad Cotti

    (Department of Economics, University of Wisconsin, Oshkosh)


The economic outcomes surrounding the dramatic spread of “Las Vegas” style casinos in the United States has become a point of great interest and inquiry both politically and academically. Prior research has tended to focus on regional studies and provided uniform conclusions regardless of differences in the nature of the community. Moreover, much of the previous empirical work fails to account for local level trends during estimation. By using a comprehensive data set on employment and earnings from across the US, and by including county-specific trends, this research hopes to alleviate these earlier concerns, as well as help reconcile differences in the early literature surrounding casino effects on related industrial sectors. Basic findings suggest that counties experience an increase in employment after a casino opens, but there seems to be no measurable effect on average earnings. More detailed analysis reveals that the effect on industries related to casinos is somewhat mixed, but in general mildly positive, as casinos provide a positive employment and earnings spillovers into the surrounding local community. Intertemporal estimation suggests that the casino effect changes over time, but also finds that time effects vary across sectors. Estimates of how overall effects vary across different population sizes find that employment growth is inversely related to county population. Finally, additional estimation finds little impact on employment levels in neighboring counties, although there are some small effects in certain industries.

Suggested Citation

  • Chad Cotti, 2008. "The Effect of Casinos on Local Labor Markets: A County Level Analysis," Journal of Gambling Business and Economics, University of Buckingham Press, vol. 2(2), pages 17-41, September.
  • Handle: RePEc:buc:jgbeco:v:2:y:2008:i:2:p:17-41

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    References listed on IDEAS

    1. John J. Siegfried & Andrew Zimbalist, 2000. "The Economics of Sports Facilities and Their Communities," Journal of Economic Perspectives, American Economic Association, vol. 14(3), pages 95-114, Summer.
    2. Dennis Coates & Brad R. Humphreys, 1999. "The growth effects of sport franchises, stadia, and arenas," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 18(4), pages 601-624.
    3. Robert Baade & Robert Baumann & Victor Matheson, 2005. "Selling the Big Game: Estimating the Economic Impact of Mega-Events through Taxable Sales," Working Papers 0510, College of the Holy Cross, Department of Economics.
    4. Robert Baade & Victor Matheson, 2005. "Have public finance principles been shut out in financing new sports facilities in the United States?," IASE Conference Papers 0527, International Association of Sports Economists.
    5. Dennis Coates & Brad R. Humphreys, 2002. "The Economic Impact of Postseason Play in Professional Sports," Journal of Sports Economics, , vol. 3(3), pages 291-299, August.
    6. Robert A. Baade & Victor A. Matheson, 2001. "Home Run or Wild Pitch?," Journal of Sports Economics, , vol. 2(4), pages 307-327, November.
    7. Dennis Coates & Brad R. Humphreys, 2001. "The Economic Consequences of Professional Sports Strikes and Lockouts," Southern Economic Journal, Southern Economic Association, vol. 67(3), pages 737-747, January.
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    Cited by:

    1. Karl R. Geisler & Mark W. Nichols, 2016. "Riverboat casino gambling impacts on employment and income in host and surrounding counties," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 56(1), pages 101-123, January.
    2. Humphreys, Brad R. & Marchand, Joseph, 2013. "New casinos and local labor markets: Evidence from Canada," Labour Economics, Elsevier, vol. 24(C), pages 151-160.
    3. Douglas M. Walker, 2010. "Casinos and Crime in the USA," Chapters,in: Handbook on the Economics of Crime, chapter 19 Edward Elgar Publishing.

    More about this item

    JEL classification:

    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism


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