THE IMPACT OF EMPLOYMENT EXPANSION ON RURAL COMMUNITY SERVICE EXPENDITURES: A SMALL AREA MODEL

INTRODUCTION [9, pp. 97-100]. Their analysis suggests that communities should exercise great caution in attracting Considerable attention has been devoted to new industry, but the authors develop no economic understanding factors that influence public service criteria for analyzing the impact of new jobs on the expenditures in rural communities. Much public community service cost burden. service research has been focused on the question of whether economies of population size exist for public service delivery systems, and, if so, what are the OBJECTIVES optimum size delivery systems. Of particular concern The primary objective of this study was to to communities is the impact of economic growth on develop a simplified model linking changes in comprovision of public services. Community leaders need munity public service operating expenditures to to know how to plan for provision of these services economic growth. Such a model would be useful to when facing changing economic conditions. They local leaders if its results could be readily applied to must be able to evaluate whether or not economic local conditions, if it were inexpensive to build, if growth, especially rural industrialization, should be necessary data are available, and if the model could followed as a strategy for enhancing both quality and be inexpensively updated. A simplified economic base quantity of these services. model utilizing cross-sectional employment data from The functional relationships between public secondary sources has been used to estimate basic service costs and factors such as population, income employment multipliers. These multipliers measure and population density have been dominant research effect on the region's total employment of one themes [4]. Schaffer and Tweeten have contributed additional job created in a sector that exports its to a better understanding of the impact of economic output to markets outside the region. Once the link growth on community services by developing a between changes in basic employment and total method of measuring the net economic impact of employment is established and changes in total industrialization on the public sector [7]. Their employment are linked to population growth, the model estimates direct and indirect benefits and costs causal relationship linking impact of growth on public of rural industrialization to the public sector, using service costs is completed by establishing the relationmultipliers generated in a "from-to" model to ship between population growth and public service measure the indirect effects [8]. expenditures. Average and marginal cost curves are Summers and others conclude, after reviewing derived from the estimated relationship between almost 200 studies of non-metropolitan industrializacommunity public service expenditure and population. tion since 1945, that industrial expansion signifiThe model, therefore, provides a means of estimating cantly increased a community's public service cost the impact of changes in basic employment on average both directly and through induced population growth and marginal operating costs of community services.