The February issue of the Economic Development Quarterly contains the following papers, which can be found at https://journals.sagepub.com/home/edq:
By Kingsley Haynes, Shiquin Liu, and Haifeng Qian
Small independent cities are often ignored in regional research studies. This paper explores the factors that impact entrepreneurship in these under researched communities, which are defined by the U.S. Census as micropolitan areas: an urbanized area with a population between 10,000 and 50,000 persons. Examining the period 2010 to 2015, the authors find that entrepreneurship in these areas is driven by population growth, the number of middle age residents (45 to 64 years of age), number of small businesses, and its natural amenities.
The paper also examines the alterative environment facing high-tech entrepreneurs in micro and metro areas and finds that population density is important in the latter but not the former. Small cities may not have the critical mass necessary for agglomerative effects to kick in.
By Michael Beeth, Brock Couch, Jessica Doering, Rebecca Konz, Margaret Mohr-Schroeder, Brandon Ofem, Samuel J. Polizzi, Gillian Roehrig, Keith Sheppard, and Gregory T. Rushton
Some may be surprised to see a paper using social cognitive theory (SCT) and concept of self-efficacy—the ability of a person to believe he/she can successfully complete the task expected—among STEM teachers in an economic development journal. However, the importance of STEM education to employment and productivity has been widely accepted. Across the nation, communities are facing both a serious shortage of STEM teachers and an inability to keep STEM teachers in the classroom. Ofem and his co-authors examine the factors that impact a STEM teacher’s ability to believe that he/she belongs and does the job. They found that a teacher’s level of self-efficacy, across gender, depends of the “communities of practice” where they work.
By Tyler Morin and Mark Partridge
Regional economic developments efforts are typically given an impossible task: implementing effective and productive economic linkages across multi-county regions on, most-often, a shoestring budget. Morin and Partridge evaluate the economic impact of the Delta Regional Authority (DRA) – a poor, 252-county, rural region in the southern Mississippi valley. From 2002 to 2015, the DRA received $138 million or $13.80 per capita. Using a one-to-one propensity score matching and the lower Mississippi watershed as the instrumental variable, the authors found that DRA activity had a positive impact on unemployment and income growth and is associated with a decrease in child poverty. It also had little impact on the area’s net migration.
By Sohani Fatehin and David Sjoquist
This paper examines a question that has not been fully addressed: What is the relationship between a state’s tax policy and employment growth by wage level? Constructing a panel data set for the years 1977 to 2016, the authors create three wage levels of jobs: high wage, 75th percentile of earnings; middle wage, between 25th and 75th percentile of earnings; and low wage, below the 25th percentile. Using several different models, the authors found a positive tax coefficient for high wage workers; however, they remain cautious regarding the reasons for this finding. They found no consistent correlation between taxes and the growth in the other two wage-level categories.
By Richard Funderburg, Joshua Drucker, David Merriman, and Rachel Weber
This paper examines the issuance of property tax abatement in Cook County (Chicago) from 2012 to 2014, and found evidence suggesting that local governments use these abatements bundled with other economic incentives to strategically maintain industry clustering locations. This counters the more standard view that local governments use property tax abatement reactively without any policy objective, other than retaining existing businesses and/or staying competitive with surrounding communities. In addition, the authors develop three indices that can be used to identify the degree that local government clusters than use of tax abatements.
Finally, Sarah Young favorably reviews Tax Increment Financing and Economic Development: Uses, Structures and impact by C. Johnson and K. Kriz.