The Social and Economic Performance of Australia's Large Regional Cities and Towns: Implications for Rural and Regional Policy

Australia's large regional cities and towns display wide variation in how they are adjusting to the socio‐economic transitions occurring in Australia. That variation is exposed using a multi‐variate model analysing performance on a range of socio‐economic variables over the decade 1986 to 1996 for 122 cities and towns with populations of 10 000 and above at the 1996 census. Those places are classified into seven clusters of community performance reflecting opportunity/vulnerability, and their spatial patterns are mapped. The resulting framework is then used to show how the recent geography of the socio‐economic performance of the large regional cities and towns has a distinctive selectivity and contributes to opportunity in some places and the vulnerable performance of others. The influence of that selectivity can be seen in the mismatched geographic patterns evident from an analysis of shares of national population and employment change, investment in non‐residential construction, levels of welfare dependency, and the ratio between household income tax generation and transfer benefits received. The paper uses the insights drawn from that analysis to pose questions suggesting the need to rethink national policy perspectives for addressing change in non‐metropolitan Australia.     

Explaining Regional Variations in Entrepreneurship as Multiple Occupational Equilibria*

Abstract. The paper proposes a human capital‐based model of choice between paid employment and entrepreneurship that can give rise to multiple equilibria in occupational structure. The model is consistent with evidence of pronounced, persistent, and hitherto unexplained regional variations in entrepreneurship. Whether multiple equilibria emerge is shown to depend on the occupation‐specific productivity of human capital and the costs of human and financial capital. The paper goes on to discuss the implications for governments seeking to promote entrepreneurship as a tool of regional development policy.     

Welfare Reform and Economic and Housing Capacity for Low-Income Households, 1997–1999

The 1996 Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) marked the continued devolution of social policy to state and local government in addition to restructuring an ailing welfare system. Despite concerns that welfare recipients would find greater obstacles to economic stability as a result, declining welfare rolls have been accompanied by declining poverty rates over the past seven years. An important question is whether low‐income families have gained greater employment and housing capacity following welfare reform. Moreover, does capacity vary across states with different welfare policies? In addition, do families face greater economic vulnerability with respect to food scarcity and health care? This article uses the data from the 1997 and 1999 waves of the National Survey of America's Families to systematically assess differences in capacity and vulnerability among lower income families across different policy regimes. Using two measures of capacity for housing and employment, and quality of life, findings suggest that more stringent welfare rules are related to greater job and housing attainment but a reduced quality of life.     

The Effectiveness of Jobs Reservation: Caste,Religion and Economic Status in India

This article investigates the effect of jobs reservation on improving the economic opportunities of persons belonging to India's Scheduled Castes (SC) and Scheduled Tribes (ST). Using employment data from the 55^th NSS round, the authors estimate the probabilities of different social groups in India being in one of three categories of economic status: own account workers; regular salaried or wage workers; casual wage labourers. These probabilities are then used to decompose the difference between a group X and forward caste Hindus in the proportions of their members in regular salaried or wage employment. This decomposition allows us to distinguish between two forms of difference between group X and forward caste Hindus: ‘attribute’ differences and ‘coefficient’ differences. The authors measure the effects of positive discrimination in raising the proportions of ST/SC persons in regular salaried employment, and the discriminatory bias against Muslims who do not benefit from such policies. They conclude that the boost provided by jobs reservation policies was around 5 percentage points. They also conclude that an alternative and more effective way of raising the proportion of men from the SC/ST groups in regular salaried or wage employment would be to improve their employment‐related attributes.     

DO LOCAL AMENITIES AFFECT THE APPEAL OF REGIONS IN EUROPE FOR MIGRANTS?*

ABSTRACT This paper delves into the factors, which determine the attractiveness of regions in Europe for migrants. Contrary to the literature on the United States, which has increasingly focused on the role of amenities, existing research in Europe tends to highlight the predominance of economic conditions as the main drivers of migration. Differentiating between economic, sociodemographic and amenity‐related territorial features, we examine the appeal of various regional characteristics for migrants by analyzing net migration data for 133 European regions between 1990 and 2006. Our results show that, in addition to economic, human capital‐related and demographic aspects, network effects and—in contrast to existing literature—different types of regional amenities exert an important influence on the relative attractiveness of sub‐national territories across the European Union. Our findings therefore indicate that locational choices in Europe may be much more similar to place‐based preferences in the United States than originally thought.     

Spatial Analysis of Employment and Population Density: The Case of the Agglomeration of Dijon 1999

The aim of this paper is to analyze the intraurban spatial distributions of population and employment in the agglomeration of Dijon (regional capital of Burgundy, France). We study whether this agglomeration has followed the general tendency of job decentralization observed in most urban areas or whether it is still characterized by a monocentric pattern. To that purpose, we use a sample of 136 observations at the communal and at the IRIS (infraurban statistical area) levels with 1999 census data and the employment database SIRENE (INSEE). First, we study the spatial pattern of total employment and employment density using exploratory spatial data analysis. Apart from the CBD, few IRIS are found to be statistically significant, a result contrasting with those found using standard methods of subcenter identification with employment cut‐offs. Next, in order to examine the spatial distribution of residential population density, we estimate and compare different specifications: exponential negative, spline‐exponential, and multicentric density functions. Moreover, spatial autocorrelation, spatial heterogeneity, and outliers are controlled for by using the appropriate maximum likelihood, generalized method of moments, and Bayesian spatial econometric techniques. Our results highlight again the monocentric character of the agglomeration of Dijon.     

WHAT DO BUSINESS CLIMATE INDEXES TEACH US ABOUT STATE POLICY AND ECONOMIC GROWTH?*

ABSTRACT State business climate indexes capture state policies that might affect economic growth. State rankings in these indexes vary wildly, raising questions about what the indexes measure and which policies are important for growth. Indexes focused on productivity do not predict economic growth, while indexes emphasizing taxes and costs predict growth of employment, wages, and output. Analysis of sub‐indexes of the tax‐and‐cost‐related indexes points to two policy factors associated with faster growth: less spending on welfare and transfer payments; and more uniform and simpler corporate tax structures. But factors beyond the control of policy have a stronger relationship with economic growth.     

REGIONAL POPULATION–EMPLOYMENT DYNAMICS ACROSS DIFFERENT SECTORS OF THE ECONOMY*

ABSTRACT An important subset of the literature on agglomeration externalities hypothesizes that intrasectoral and intersectoral relations are endogenously determined in models of local and regional economic growth. Remarkably, structural adjustment models describing the spatio‐temporal dynamics of population and employment levels or growth traditionally do not include intersectoral economic dynamics. This paper argues and shows that allowing for economic linkages across sectors in these models adds considerable value, especially in forecasting. An econometric model of population–employment dynamics, in which sectoral variations in economic development are explicitly taken into account, is applied to a large urban planning policy proposal in the Netherlands. The empirical analyses suggest that population dynamics are largely exogenous, population changes drive employment in particular in the industry and retail sectors, and employment in all sectors depends strongly on intersectoral dynamics. Intersectoral dynamics appear as important drivers of regional sectoral employment changes; they are even more important than population changes, and their effect shows up clearly even within the Dutch institutional context where strict regulatory housing and planning restrictions are enforced.     

Contagious Social Practice?

This paper explores the usefulness of spatial innovation diffusion theory for understanding the observed evolution of the social practice of attaining public support as a substitute for working. The empirical example chosen is sick leave. Several European countries have experienced a striking increase in costs for sick leave during the recent years, nowhere however as dramatic as in Sweden. Public costs for sick leave have doubled since 1997 while general health and life expectancy continually improve. No more than a small percentage of this change can be assigned to compositional changes in the population and labour market with respect to age, sex, education, location and sector of employment. Neither has economic benefit conditions changed substantially during this period. What essentially remain, as possible explanations, are changes in attitudes and practices among beneficiaries and physicians. One can observe substantial regional differences in the level of sick leave and apparent traces of spatial autocorrelation in the pattern. The spatial diffusion hypothesis was examined by help of a multivariate analysis based on socio‐economic panel data including sick leave benefits and location for each individual in the labour force 1996–2000. The analysis indicates that the neighbourhood effect is substantial on the local (290 municipalities) and the regional (21 counties) level. Largely, the regional diffusion effect remains when also controlling for more persistent average differences between counties. A semi‐public spatial attitude diffusion process, mainly operating at municipality and county levels, seems to be responsible for a substantial part of the observed increase in cost for sick leave in the period 1996–2000.     

外资流动的动力学研究——以广东省为例

资本流动受推力、引力和阻力作用,在空间上先向中心城市和交通干线集聚,然后沿城市体系和交通干线作"蛙跳"式、点线式推进,最后向乡村面状扩散。资本流动对流入地区产生正负两方面的影响。投资环境建设和引资工作应针对不同阶段资本流动的特点和驱动因素,采取相应的政策,调控外资流动,减少负面影响,使利用结构合理化。     

Migration and employment change: empirical evidence on the spatial and temporal dimensions of the linkage

"This paper uses a unique set of [U.S.] data to estimate the magnitude of the linkages between employment changes and net employment migration. A simple simultaneous system is specified and estimated for 17 consecutive years. In an average year two extra jobs attract about one additional net migrant, and one additional net migrant has a direct effect on area employment of almost 1.4 jobs." The data are from the One-Percent Social Security Continuous Work History Sample and are for the years 1958 to 1975. The changes in this relationship over time as the economic situation varies are analyzed.     

Second‐Order Devolution and Administrative Exclusion in the Temporary Assistance for Needy Families Program

With the passage of welfare reform in 1996, state and local governments gained substantial authority to design and implement their own welfare programs. Proponents of devolution asserted that, under devolution, local governments would be better able to tailor program administration to meet local economic needs. However, opponents contended devolution could lead to local governments seeking to control costs by limiting access to welfare. Meanwhile, existing research suggests that economics will not play an important role in determining welfare provision. This article investigates these competing claims by assessing the relationship between economic conditions and administrative exclusion, which is making programs so hard to access that potential and current recipients decide to forgo benefits, in a state that gives counties significant authority over welfare provision. To do so, I assess whether county application denial, sanctioning, and case closure rates are influenced by changes in local economic characteristics. I find that, even during periods of substantial economic distress, county practices related to administrative exclusion are largely unresponsive to changes in unemployment, child poverty, and fiscal constraints. These findings call into question the responsiveness of the devolved social safety net for poor families.     

ECONOMIC FUNDAMENTALS IN LOCAL HOUSING MARKETS: EVIDENCE FROM U.S. METROPOLITAN REGIONS

ABSTRACT.  This paper investigates the effects of national and regional economic conditions on outcomes in the single-family housing market: housing prices, vacancies, and residential construction activity. Our three-equation model confirms the importance of changes in regional economic conditions, income, and employment on local housing markets. The results also provide the first detailed evidence on the importance of vacancies in the owner-occupied housing market on housing prices and supplier activities. The results also document the importance of variations in materials, labor and capital costs, and regulation in affecting new supply. Simulation exercises, using standard impulse response models, document the lags in market responses to exogenous shocks and the variations arising from differences in local parameters. The results also suggest the importance of local regulation in affecting the pattern of market responses to regional income shocks.     

FULL EMPLOYMENT AS A POLICY ISSUE

Passage of the Humphrey-Hawkins Full Employment and Balanced Growth Act of 1978 is the most recent step in the development of a national full employment policy. This article traces the origin of the legislative debate over full employment back to the 1940s, the only previous time that Congress gave serious consideration to full employment legislation. It analyzes the conflicting economic and political interests and philosophies that led to the defeat of the Full Employment Bill of 1945 and to passage of weaker legislation, the Employment Act of 1946, which dropped the commitment to full employment. The article then traces the contours of unemployment since World War II: recurrent recessions; significant unemployment between recessions; the unequal distribution of joblessness, hitting hardest at groups such as minorities, women, and youths; and growing urban and regional unemployment. Some of the hidden social, human and economic costs of unemployment are explored. So is the relationship between unemployment and crime, poverty, welfare, the urban crisis and inequality. Full employment reemerged as a major issue in the 1970s because of the impetus from groups whose unemployment problems persist between recessions. Coalitions of these groups pressed for a national policy to secure full employment for all groups. This led to passage of the Humphrey-Hawkins Act. But the controversy over full employment has not ended. Attempts to implement the Act, the article concludes, may heighten underlying controversies over issues such as inflation, wage, price and profit controls, the environment, and job creation and may make full employment one of the leading domestic issues of the 1980s.     

The Net Effects of Large Plant Locations and Expansions on County Employment*

This paper argues that the net economic impact of new firm locations or expansions is determined by a multitude of opposing forces. Using a unique database, I set out to evaluate the net effects of these opposing forces by looking at the net change in local employment and population arising from large (greater than 300 new jobs) firm locations or expansions in the State of Georgia. The analysis suggests that the employment multipliers associated with new firm locations are much less than one; that is, the net employment effect of a large firm opening is smaller than the gross employment impact. This result is consistent with other empirical economic impact studies, which find multipliers much smaller than those of typical input–output models, often less than unity, and a previous study showing little net effect of large plant openings. Expansions of existing establishments are shown to have substantial multiplicative effects, however, with an average employment multiplier of 2.0. I discuss possible reasons for differential impacts across new and expanding firms, focusing on the nature of the firms. Differences in net impact across industries and high‐tech versus low‐tech firms also is evaluated. I find that the impact of large firm locations or expansions on population in the resident county generally is negative, but positive for the broader region encompassing the county of location and its contiguous neighbors.     

The geography of venture capital investments in the UK

The role of venture capital in economic development increasingly is recognized as central to the development of an entrepreneurial economy. However, the supply of venture capital is not distributed evenly across the space economy. In the UK, evidence for the 1980s demonstrated that venture capital investments were highly concentrated in Greater London and the South East, reinforcing the existing patterns of regional concentration of economic activity. This paper reviews the regional distribution of venture capital investments in the UK in the 1990s, a period of massive growth in venture capital investment activity. It concludes that the regional concentration of venture capital investment has been considerably reduced since the 1980s. However, more detailed analysis of the data demonstrates that this shift towards a less unequal regional distribution has been driven by so–called 'merchant' venture capital – investments in large–scale management buy–outs and buy–ins which facilitate corporate restructuring through ownership change and often have adverse consequences for employment. 'Classic' venture capital – investments in young entrepreneurial companies with high growth potential – remains highly concentrated in London and the South East, and also in Scotland. This reflects both supply– and demand–side factors. The Government's new regional venture capital funds are unlikely to be effective in closing this regional finance gap. An alternative approach to intervention, in the context of the increasing globalization of venture capital investments, is to seek to attract venture capital money and expertise from elsewhere.     

UNDERSTANDING LOCAL CONTENT DECISIONS: ECONOMIC ANALYSIS AND AN APPLICATION TO THE AUTOMOTIVE INDUSTRY*

ABSTRACT In industrializing regions, foreign investments often generate spillovers through regional backward links. This situation may create a gap between private and social valuations of resources, resulting in a level of local content below what would be optimal for the economy. This situation creates an opportunity for the enactment of domestic content regulations. This paper presents a model to understand how these policies condition the decisions of the economic agents and affect economic welfare. Then, it simulates the model using a case study of the automotive sector. Results suggest that, in certain conditions, this local content regulation can be welfare enhancing.     

Elites in Local Development in the Philippines

For many Philippine provinces, decentralization and more autonomous local development planning did not lead to the desired outcomes. This article examines the experiences of the two provinces of Cebu and Leyte. While Cebu became a centre of trade and industry, Leyte is still struggling with its local economy oriented to natural resources. A main reason for the divergent development paths of the two islands can be found in the emergence of different elite structures, which resulted in different path‐dependent patterns of economic specialization. Despite this different historical experience, both provinces today suffer from similar institutional infirmities in their planning system for promoting local development. Local planning capacity constraints, such as regional and local co‐ordination and co‐operation patterns, local finances, human capital and knowledge are analysed. The Cebuano elites used the room for manoeuvre provided by decentralization reforms more successfully than elites in Leyte. This created pockets of efficiency in Cebu leading to more development‐friendly investment policies. In order to increase local and regional planning capacity, short‐term interventions and policy reforms at the local, regional and national level are discussed.     

IS SOCIAL CAPITAL USEFUL FOR EXPLAINING ECONOMIC DEVELOPMENT IN POLISH REGIONS?

The concept of social capital is widely perceived as a promising tool for explaining differences in economic development between countries and regions. According to this theory, weak links (bridging social capital) and social trust in an area favour its better access to other forms of capital, that is, economic and human capital. However, strong links (bonding social capital) may stifle creativity and entrepreneurship. Since the vast majority of research on the impact of social capital on economic development focuses on highly developed Western European countries, it seems particularly interesting to evaluate the usefulness of this approach when applied to post‐communist countries with their different experiences. The objective of this article is to identify the spatial variation of different forms of social capital in regions of Poland and then to test a hypothesis on the impact of this capital on regional economic development. The results demonstrate that despite the existing differences between regions there are no significant relationships between levels of social capital and economic development. This may be explained either by low social capital levels or by the overall degree of Polish economic development.     

Toward Self-Sufficiency: Evaluating a Transitional Housing Program for Homeless Families

Homeless families face the economic and personal challenges of sparse employment opportunities and child care and nutrition needs, compounded by the loss of adequate housing. The Family Development Center (FDC) is a transitional housing program in Atlanta, Georgia, designed to provide young homeless mothers an opportunity to emerge from what may well be desperate circumstances and begin the journey to economic self-sufficiency. This paper describes the research on programs for homeless families and presents the results of a comprehensive look at the operation and effectiveness of the FDC program during its first 5 years of existence. The work shows that while many families were able to effect notable positive changes in their lives during and after taking part in the housing program, for some the recovery from homelessness was extremely difficult. For even the most successful formerly homeless families—those that secured employment, housing, and other social supports—the escape from welfare dependence and poverty proved very difficult. The paper concludes with a discussion of the implications for relevant public policy.