Abstract
Economic development has been uneven within many states, often resulting in wide geographic disparities in unemployment. Using county-level panel data, this study examines variation in unemployment rates within Georgia to determine the potential role that state and local economic development policy may play in reducing unemployment in underdeveloped areas. Thus, a particular concern of the study is whether metropolitan areas and central cities have different unemployment rates, once other characteristics are accounted for. The findings of the study do not support urban areas, or, alternatively, very rural areas, as inherently having different unemployment rates. Thus, state economic development policy need not focus on enhancing one type of area over the other to reduce the state unemployment rate. However, the findings suggest the need for increasing high school attainment rates, providing affordable day-care, and addressing the high unemployment among African-Americans.
Highlights
State and local policymakers have increasingly been confronted with the problem of uneven economic growth and development within their states
Using county-level panel data for Georgia, we examined the issue of uneven growth within state economic development
Our findings suggest that differential employment growth contributes to area unemployment differences, other factors were at least as important
Summary
State and local policymakers have increasingly been confronted with the problem of uneven economic growth and development within their states. Even in the smaller metropolitan areas, economic growth has been unsteady, and in much of rural Georgia, growth has at best stagnated, if not outright declined This uneven growth has led commentators to voice concerns that there are "two" Georgias-greater Atlanta and the rest of Georgia. Several targeted strategies have been proposed, such as improving the educational system in underdeveloped areas and directly encouraging economic development in the second-tier cities. To improve their economic development efforts, Georgia and North Carolina have both created several development regions. Region 3, which is made up entirely of counties in the Atlanta metropolitan area, has the lowest unemployment rate. Note: Areas in parentheses are outside the region, but strongly influence the region
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