Economic Development Quarterly

Latest Research Featured in Economic Development Quarterly

The August issue of Economic Development Quarterly is the largest on record and reflects a multi-year effort by the W.E. Upjohn Institute for Employment Research, Economic Development Quarterly, and the Federal Reserve Bank of Chicago to pull together quality research on the challenges facing public policy makers in addressing the economic development challenges in rural areas. Moreover, the three organizations are conducting a conference in Grand Rapids, Michigan, on September 28-29, 2022, that will offer a forum for researchers and practitioners to share ideas and policy suggestions on rural development.

In his introduction to the issue, “Introduction to the Special Issue on Rural Economic Development: New Research Insights and How the COVID-19 Pandemic May Impact Future Investment Strategies,” Martin Lavelle presents key highlights regarding current trends in rural areas. From 2010 to 2014 economic growth in urban and rural areas were similar, but from 2015 to 2020 growth in rural areas lagged. In the 10 years ending in 2020, population in nonmetro areas was stagnant although it grew by nearly 9% in metro areas.  Still, nonmetro per capita income grew slightly more during the period. Unfortunately, COVID-19 hit rural areas harder than metro areas, experiencing higher hospitalization rates and resulting in a lower percentage of the population being vaccinated.

Xue Zhang, in her paper, “Linking People’s Mobility and Place Livability: Implications for Rural Communities,” shows that, while strong labor markets can attract movers, an area’s civic and social opportunities and natural amenities remain important for older populations. The combination of social and natural amenities could make rural areas more attractive to older migrants, especially if housing prices are low as well.

In his paper, “The Impact of Natural Resource Dependence on Rural American Economic Prosperity from 2000 to 2015,” Tom Mueller examines both extractive industries (mining) and a nonextractive recreational industry (tourism). He found that in rural areas employment in extractive activities is associated with a decline in per capita income and results in more income inequality and higher poverty rates. A concentration in amenity-based sectors is also associated with a decline in a county’s residents’ per capita income and an increase in poverty rates but has no impact on income inequality.

In their paper, “The Value of Rural and Urban Public Infrastructure,” David Albouy and Heejin Kim estimate infrastructure investments from 1970 to 2012 in both urban and rural areas. Their analysis suggests that urban areas experience higher employment growth, while rural areas see higher home values with infrastructure spending. Overall infrastructure spending improves both quality of life and productivity in both settings; however, a cost-benefit analysis suggests that they generate more value in urban areas.

Another name for a rural area is small town America. Andrew Van Leuven, in his paper “The Impact of Main Street Revitalization on Small-Town Business Districts,” finds that the Main Street Program, if focused on addressing the unique conditions facing a town’s central business district, can increase employment and help to create new retail businesses. Unfortunately, in his multistate analysis, Van Leuven finds that the impact of Main Street Programs is short-lived.

Rural areas are not known for innovation, but innovation is just as important in rural areas as  in urban regions. Shiqin Liu’s paper, “The Urban-Rural Divide:  The Effect of Small Business Innovation Research Programs in Small and Non-Metro Counties,” finds that while small and medium-sized establishments in nonmetro and small metro areas benefit from being awarded Phase I funding from the Small Business Innovation Research (SBIR) program, the SBIR program has a greater impact in small metro areas. 

In their paper, “How Targeted Government Investment in Rural Business Innovation Can Induce Schumpeterian Entrepreneurial Activity,” John Mann, Steven Miller, and Trey Malone look at the SBIR Phase II awards. They find that rural recipients are as likely to produce invocations and patents as their urban counterparts.

Any rural economic developer will tell you that recruiting physicians is a major challenge. In their paper, “What Moves Physicians to Work in Rural Areas? An In-Depth Examination of Physician Practice Location Decisions,” Xiaochu Hu, Michael Dill, and Sarah Conrad find that doctors tend to practice in the same state in which they get their degree and that older doctors are attracted to rural locations where they want to retire. Unfortunately, they also find that enrollments at rural-based medical schools are declining.

Looking to the past for new ideas, Erin Troland and Theordore Figinski, in their paper “Bringing Health Care to Appalachia: The Long-Run Impact of a Rural Health Care System,” examine the impact of the United Mine Workers of America (UMWA) health care system in Appalachia during the 1950s.  Overall, the union’s hospital system survived the trend of decreasing hospital bed availability. Moreover, the union health system of hospitals offered competitive salaries that attracted and retained quality doctors in high poverty rural areas.

Too often, rural areas are simply equated to nonmetro counties, which does not fully capture the unique economic and social environments in rural areas. Two papers in this special issue take a more data-driven approach to defining rural areas. Christelle Khalaf, Gilbert Michaud, and G. Jason Jolley, in their paper “Toward a New Definition of Rural:  Mapping Resources, Opportunities, and Challenges,” formed clusters of counties with similar economic and sociological profiles by using unsupervised machine learning. Using a technique called affinity propagation, Marcello Graziano, Benjamin Heumann, and Maurizio Fiaschetti, in their paper “A Data-Driven Algorithm to Redefine the U.S. Rural Landscapes:  Affinity Propagation as a Mixed-Data/Mixed-Method Tool,” group communities with similar characteristics by zip code. Both methods allow rural communities to drill down to identify other rural communities that share many commonalities.

Finally, Christiana McFarland, in her paper “Local Employment Impacts of Connectivity to Regional Economies:  The Role of Industry Clusters in Bridging the Urban-Rural Divide,” examines the positive role that regional economic connectivity has on economic growth. She finds that positive regional connectivity occurs when local industries make use of available resources in existing regional clusters, which can be much larger than the specific industry.

The latest issue of Economic Development Quarterly (EDQ) is now available online at https://journals.sagepub.com/home/edq.

More information on the Sept. 28-29 conference, Creating Conversations on the Challenges and Opportunities Facing Rural Economic Development.