The Economic and Fiscal Impacts of the Elderly on a Small Rural Region

Abstract

Recruiting retirees is a popular economic development strategy for rural communities. Previous research finds positive economic and fiscal impacts in communities, but it tends to assume that the elderly are homogeneous and to concentrate on planned retirement communities. At the same time, concerns are expressed that older and low-income retirees will be a burden for local government. Using a quasi-experimental design, the economic and fiscal impacts of various groups of retirees classified by age and income on a rural region in Wisconsin are simulated. All groups have positive economic benefits for the region. The impacts of the different groups of elderly vary by their income and the size of their households. Contrary to the expectations of some, all groups of retirees provide positive net fiscal impacts for local governments.