An Examination of the Local Economic Impacts of Military Base Closures

Abstract

The 1988 Base Closure and Realignment Act empowered the Commission on Base Realignment and Closure (BRAC) to undertake five rounds of significant military base closure and realignment. Investigating the economic impacts associated with base closures provides the first step in not only determining whether the BRAC Commission has effectively minimized negative impacts on affected communities but also provides guidance to policy makers in targeting future base closures, and helps affected communities prepare for the economic shocks associated with these events. This article examines (a) the local economic impacts associated with general changes in military base employment; (b) if the first four, completed rounds of BRAC closures have a significant differential impact on county-level employment; (c) whether these BRAC closures exhibit economic spillover effects on the employment of neighboring counties; and (d) if the economic impact associated with BRAC losses differs for enlisted and civilian personnel reductions.

Reevaluating the Pursuit of Defense Investment

“…Extending the analysis to downsizing, Hultquist and Petras (2012) also find that base closures announced through the highly visible BRAC process have a greater negative impact than do equivalent closures conducted without similar fanfare. Hooker and Knetter (1999) likewise identify a positive, albeit small, multiplier for enlisted personnel.…”

“…Writing recently in this journal, Hultquist and Petras (2012) introduce a distinction between types of military personnel, finding that a county-level increase in the number of enlisted military members (but not the number of defense civilians) was associated with significant private-sector employment growth. Extrapolating from regression analysis, they identify a county-level military employment multiplier of 1.19, and a federal civilian employment multiplier close to 1.…”

Contending With Defense Industry Reallocations: A Literature Review of Relevant Factors

“…For their counterfactual, Hultquist and Petras (2012) selected a comparison group of counties that were likely candidates for the BRAC rounds, but not designated. 5 The data covered 510 counties containing one or more military bases active from 1977 to 2005 and 1,211 neighboring counties.…”

“…They reported no significant change in local economies attributable to non-BRAC civilian personnel adjustments. Hultquist and Petras (2012) reported a multiplier for military-employed civilians of 0.135 for the host counties and 0.595 for neighboring counties during BRAC situations. Civilian employment expansion when bases close implies an effective use of former military assets for local employment growth, as well as evidence supporting the substitution effect.…”

Economic impact of the ministry of defence’s budget: methodological design and results for the Spanish economy

“…Moreover, various authors, such as Cowan and Webel (2005), EPS (2007), Andersson et al (2007), Thanner and Segal (2008), Paloyo et al (2010), Cowan and Gonzales (2011), and Hultquist and Petras (2012), analysed the effects of defence spending on the economy in an environment of spending cuts. In other studies, the impact that activities or facilities for defence have on the local economy, mainly arising from the existence of military installations, are analysed (Brockett et al, 2004;Schauer et al, 2004a and2004b;Sommers, 2004;Stehlik et al, 2004;Weinstein and Clower, 2004;Soden et al, 2005;Nivin and Birdwell, 2006;BBPC, 2009;Bernauer et al, 2009;Hill, 2009;Hunter, 2009;Chiappe, 2011;Hamsik and Moore, 2011).…”