Study: Jobs Following Hoosiers, Not Vice Versa

CBER is part of the Miller College of Business. CBER is part of the Miller College of Business.
MUNCIE -

New research from Ball State University suggests a "major switch" in recent years when it comes to where employers are choosing to locate. The study from the Center for Business and Economic Research finds that Hoosiers are no longer seeking communities with abundant job opportunities as they did in the 1970s. Instead, businesses and available jobs have begun to gravitate toward the places where people want to live.

Co-author Dagney Faulk says the study shows that as early as the 1970s economic development in the state was focused on luring employers to communities as a way to boost population. "That policy could be viewed as appropriate in the last few decades if accompanied by larger investments that boosted human capital and quality of place in communities - like good schools and parks. However, by the beginning of this century, policies solely to bring a factory to town no longer had meaningful impact on communities, regardless of their purported success."

"What Comes First, People or Jobs: Evidence and Lessons for Indiana" looked at population and employment growth throughout the 1970s and 2000s in all 92 Indiana counties.

CBER Director Michael Hicks says "the clear implication of this finding is that policies that focus on relocating capital investment such as a new factory, in order to move people to jobs, will be ineffective. In contrast, policies that effect the relocation of people to regions will also increase employment availability."

The most successful places in Indiana over the past 15 years, the research suggests, "have done the least business attraction such as offering generous tax breaks and grants to a new employer. Instead, these communities focused on improvements to quality of place and education." Hicks says these policies should be "widely mimicked." He adds "this analysis suggests that business attraction does not grow communities at the county or sub-county level, though at the appropriate regional level, business attraction may be a useful policy adjunct. There is evidence that the largest urban regions have greatly reduced their direct business attraction efforts."

The CBER says the key findings include:

  • Education attainment for employees matters for jobs in both the 1970s and 2000s, but did not play a role in population change several decades ago.
  • Amenities played no role in job growth in either decade but were correlated with population growth.
  • Urban influence of a county did not have an impact in either decade.
  • Regional development – or the clustering of employment opportunities in several adjoining counties had a significant impact on population and job growth as commuting became an option for two-income families.

You can connect to the full study by clicking here.

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