Policy Series: Labor and Demographics 

Paper number

41

2020

William H. Rogers

This report summarizes the Heartland’s recent economic performance relative to the rest of the United States. I focus on two key economic indicators: total population change since 1969 and net domestic migration measured using earning capacity instead of population. I find that the Heartland’s metropolitan areas are significantly lagging the entire rest of the nation in working-age population and working-age earning capacity growth. I also find that the Heartland’s nonmetropolitan areas are in absolute decline when viewed through the lens of working-age population and earning capacity. Unlike the metropolitan performance, however, there is nothing exceptional about the non-metropolitan decline. My analysis indicates that Missouri’s rural areas are performing slightly better than the region and most neighboring states.

Paper number

39

2020

Mallory Rahe

This paper uses publicly available datasets from federal government agencies to explore differences in income inequality across rural and urban Missouri in the aftermath of the Great Recession to better understand how these factors are associated with relative job loss and job recovery. Previous work has explored various explanations for Missouri’s weak economic performance; could income inequality be a contributing factor? I find that Missouri has lower income inequality than the nation, largely from a lack of high-wage jobs. Missouri, and especially rural Missouri, obtains lower income inequality primarily through a lack of high-income households. Across the nation, rising income inequality is concentrating wealth and constraining consumption. Examining the state across multiple measures, Missouri’s residents have limited abilities to consume and invest, which inhibits economic growth. Low median household incomes and a lack of highly paid jobs are all contributing to slow population growth and slow or negative employment change during the past two national recessions. These challenges are present in both rural and urban areas of the state.

Paper number

38

2020

Sarah A. Low, Austin Sanders, and Mark C. White

This paper identifies the trends and differences in entrepreneurship between Missouri’s metropolitan and nonmetropolitan (rural) areas to better inform policy intended to promote economic development through entrepreneurship. We examine three different entrepreneurship proxies across time, with a focus on how to best encourage rural entrepreneurship and its resilience going into the next business cycle. We also examine the geography of entrepreneurship in Missouri and highlight areas where greater entrepreneurship may offer a sustainable path to greater economic development. This is important for policymakers to consider, because the “entrepreneurial” businesses in rural Missouri offer communities the goods and services often associated with increases in rural qualityof-life (e.g., café, grocery store, farmers’ market) and help maintain a vibrant sense of place in rural communities. It is this sense of place that is essential to retain other businesses in rural communities, a phenomenon known as place-making.

Paper number

36

2019

Adriano Udani

Despite political rhetoric condemning immigrants’ contributions to the United States, scholars have persistently demonstrated positive social and economic contributions of immigrants. Studies such as these pose important policy implications for Missouri. To what extent does immigration contribute to recent Missouri economic outcomes? How are immigrant workers distributed across Missouri? Are there positive economic outcomes associated only with immigration of high-skilled workers? My analysis shows that higher per capita personal income and higher employment in certain industrial sectors are not solely attributed to high-skill workers. The results here suggest that economic productivity in Missouri is attributed to having a mix of high and low-skilled workers, and not solely one or the other.

Paper number

35

2019

Mark Tranel

While Missouri’s population has grown slowly over the past 50 years its characteristics have evolved in important ways. This paper first describes the contemporary demographic profile of who Missourian are, where and how they live. It then examines the trends over the period 1960 to 2010. The data for Missouri are compared to national characteristics and trends to provide points of similarity and contrast. The factors that have changed, and some that have not, have implications for actions that need to be taken in response to challenges Missouri faces because of these demographic dynamics.

Paper number

32

2018

Jonathan Meer

The minimum wage has long been a contentious policy issue, but particularly so in Missouri in recent years. When St. Louis raised its city minimum wage in 2015, with increases planned to $11 per hour by 2018, legal battles held up implementation and a state law eventually overrode the local ordinance. This essay delves into the sources of this policy dispute, first by examining the theoretical issues involved, then focusing on recent research, particularly regarding outcomes other than the traditional focus on employment outcomes. Using minimum wage increases as an anti-poverty policy is not likely to succeed. While the empirical evidence using more traditional models is decidedly mixed, once we allow for longer-lived dynamic effects, the evidence shows that job growth declines among those most often viewed as beneficiaries of minimum wage increases. Already-marginalized groups are likely to be hardest hit as employers substitute towards workers with more experience.

Paper number

31

2018

Gail Heyne Hafer and R.W. Hafer

It has been shown that country-level IQ and aggregated performance by school-age children on international assessment tests in math and science are by-in-large capturing analogous indicators of the cognitive human capital. We expand that analysis by comparing country-level IQ to the World Economic Forum’s Human Capital Index (HCI). This index, comprised of several dozen separate indicators, accounts for inputs and outcomes to measure human capital, across age profiles and gender. Two outcomes are of note. First, there is a positive, significant correlation between IQ and the vast majority of the component indicators in the HCI across all age cohorts. Second, because the HCI’s interpretation of educational attainment extends beyond formal education by including indicators such as on-the-job learning and other work-related skills, our finding that IQ is positively correlated with these measures suggests a deeper connection between national average IQ and the fundamental factors of what constitutes the cognitive side of human capital development.

Paper number

30

2018

Timothy J. Gronberg, Dennis W. Jansen, and Lori L. Taylor

This article presents an overview of the state of the Missouri economy. We begin by assessing measures of economic output. Compared to the nation and to neighboring states, Missouri’s economy has hardly grown over the past 20 years. We identify several sources for this lackluster record. Perhaps one of the most important is the observation is that productivity in Missouri—output per worker—is lower than the national average. This poor productivity record quite possibly stems from two sources. One is problematic trends in labor force quality. A key factor here is a lack of commitment by the state to a higher educational system that is capable of producing a sufficient number of college-educated individuals. The other is an environment that not only does not attract well-educated individuals from outside the state, but induces domestic residents to leave for better opportunities elsewhere. This “brain drain” is detrimental to the state’s economic future. The other is the composition of the state’s industries. Perhaps a relic of past industrial policy, Missouri’s industrial make-up today is one that is weighted too heavily toward non-growth industries. This mix of industries has proved to be a drag on the state’s economic growth. Based on our analysis, we offer several policy prescriptions. In the final analysis, Missouri needs more productivity, more highly educated workers, and more jobs for these productive and highly educated workers.

Paper number

26

2017

Gail Heyne Hafer and R.W. Hafer

This study investigates the relationship between education and several economic and social outcomes. On the economic side we consider the link between education and income. We also look at how education is related to health choices and social cohesion. Our basic question is: “What is the relationship between educational decisions made in the past and economic and social outcomes today?” Answers to this question reflect not only personal educational choices, but also shed light on the policy issue of why it is important to improve educational attainment.

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The John W. Hammond Institute for Free Enterprise
Lindenwood University

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