Does Public Lands Policy Affect Local Wage Growth?

Abstract

The effects on wage growth of management practices applied on public lands in the Northern Forest region of the United States are quantified. A central objective is to determine if the management of public lands for preservationist uses results in lower average wages. This is a frequent claim made by critics of land preservation who argue that preservationist management, by prohibiting resource extraction, causes the composition of employment to shift from high‐wage jobs in resource‐based manufacturing to low‐wage jobs in the service sector. A model of simultaneous employment and net migration growth is estimated with data on non‐metropolitan counties over the period 1990 to 1999 and applied in a recursive relationship to wage growth. In earlier studies, models of this type have typically been specified in levels. Time‐series evidence that supports a preference for growth rates is provided as the form for such models. Exogenous variables in this model include the 1990 shares of the county land base that are publicly owned and managed for preservationist (non‐extractive) uses and multiple (including extractive) uses. It was found that wage growth rates are not significantly affected by the shares of land under either management regime. As well, recent declines in national forest timber sales are found to have no effect on wage growth.