Measuring the Impact of Meat Packing and Processing Facilities in Nonmetropolitan Counties: A Difference-in-Differences Approach

Iowa State University, Ames, Iowa, United States
American Journal of Agricultural Economics (Impact Factor: 1.33). 08/2007; 89(3):557-570. DOI: 10.1111/j.1467-8276.2007.01003.x
Source: RePEc


Considerable controversy exists regarding the costs and benefits of growth in the meat packing and processing industry for
rural counties. This study investigates the effects of this industry on social and economic outcomes in nonmetropolitan counties
of 23 Midwestern and Southern states from 1990 to 2000. Results suggest that as the meat packing industry's share of a county's
total employment and wage bill rises, total employment growth increases. However, employment growth in other sectors slows,
as does local wage growth. Industry growth has little impact on local crime rates or on growth of government spending on education,
health, or police protection.

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    • "Pull forces attracting Latino/a newcomers to rural areas have a positive effect in employment growth; however, wages in rural communities with meat packing and processing companies are not growing (Artz et al., 2007; Kochhar, 2005). Wage earnings may not be the main impetus for Latino/a immigrants' decision to migrate to the Midwest. "
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    • "In the short run, however, the transition from smaller-scale and more laborintensive production to larger-scale more capital-intensive methods can create significant economic and social dislocation, and such transitions often lead to calls for policy intervention. In the retail trade sector, for example, worries about the effects of Wal-mart super-stores on local employment and wages, and on the survival of smaller retail operations, has led to vigorous local opposition in many instances, and a growing body of empirical research on Wal-mart's labor market impact (Neumark et al 2005, Basker 2005, Artz and Stone 2006, Basker 2007). Consolidation in the meat-packing industry, and the arrival in rural areas of large meat-packing plants staffed primarily by immigrant labor, have also generated concern and research attention (Artz et al 2007, Artz et al 2008). "
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    ABSTRACT: In the past 20 years the average scale of hog operations has expanded more than fourfold, and some of the new large-scale hog feeding operations have been opposed by residents in some communities. While the environmental effects of such production have been relatively well studied, less examined are its potential positive effects on local labor markets and economies. Existing estimates based on production-function and input-output analysis imply that each additional 1000 hogs in inventory in a county generates between 3 and 7 local jobs. In this paper we adopt an econometric approach instead, to estimate the effects of changes in hog production on changes in both farm and non-farm outcomes. We find that total county employment increases by less than previously reported, with about two additional jobs being created per 1000 head of hogs in inventory.
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