Measuring the Economic Effects of Military Base Closures

33 Pages Posted: 26 Mar 1999 Last revised: 21 Dec 2022

See all articles by Mark A. Hooker

Mark A. Hooker

State Street Corporate - Advanced Research Center (ARC)

Michael M. Knetter

Wisconsin School of Business; National Bureau of Economic Research (NBER)

Date Written: February 1999

Abstract

Quite often, policy changes that are seen as welfare-improving at the national level encounter significant resistance in localities where the policies are implemented. Defense spending cuts and international trade agreements are classic examples. However, there is little systematic evidence on the magnitude of economic costs that fall on adversely affected communities. In this paper, we use a newly constructed dataset to analyze the county-level employment and personal income effects resulting from closures of military bases during 1971 - 1994. Our estimated multipliers are mostly less than one, and considerably smaller than those typically used in economic impact studies. We find that the employment costs are mostly limited to the direct job loss associated with military transfers out of the region, and per-capita income is little affected by closures on average.

Suggested Citation

Hooker, Mark A. and Knetter, Michael M., Measuring the Economic Effects of Military Base Closures (February 1999). NBER Working Paper No. w6941, Available at SSRN: https://ssrn.com/abstract=149672

Mark A. Hooker

State Street Corporate - Advanced Research Center (ARC) ( email )

One Lincoln Street
Boston, MA 02111-2900
United States

Michael M. Knetter (Contact Author)

Wisconsin School of Business ( email )

975 University Avenue
Madison, WI 53706
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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