Force Reduction, Base Closure, and the Indirect Effects of Military Installations on Local Employment Growth

Abstract This study examines the indirect effects of military installations on county–level private employment, and specifically the special cases of base closure under the Base Realignment and Closure (BRAC) proceedings of 1988, 1991, 1993, and 1995. Local employment impacts are considered within a partial adjustment construct of the changes model, a specification that facilitates the decomposition of defense personnel changes into their positive, negative, and BRAC–related components. The latter two components are subsequently examined for asymmetric effects attributable to ordinary force drawdown on the one hand, and base closure on the other. Also considered are the specific effects of direct federal assistance as well as facilities conversion and reutilization within BRAC communities.