Nonemployment Income and the Economic Base of Michigan Counties: 1959–1986

Abstract

Despite the fact that nonemployment income makes up approximately one‐third of all personal income, its impact on local area economies has not been closely examined. This study uses Michigan county data to examine the impact of nonemployment income on nonbasic income over a twenty‐seven‐year period. This impact is compared to the impact of basic income by employing regression analysis to estimate comparative multiplier effects for both types of income. Nonemployment income is found to have a significant impact on nonbasic income, particularly in metropolitan and nonmetropolitan urban counties, where its impact appears to be stronger than that of basic income.

Nonemployment Income and Natural Resource Dependence in Rural Canada

“…Kendall and Pigozzi (1994) also assert that government transfer income is more associated with groups that are older, and less likely to be employed. In Canada, the average age of retirement is 62, with the baby boomers currently on the cusp of retirement (Schellenberg and Ostrovsky 2008).…”

“…Data analysis revealed that nonemployment income comprised nearly one-third of all personal income, both in Michigan and the United States (Kendall and Pigozzi 1994). Furthermore, within Michigan's counties, it was among the fastest growing sources of personal income between 1976 and 1986.…”

“…A study of the relationship between nonemployment income and the local economies of Michigan counties for years 1959-1986 was undertaken by Kendall and Pigozzi (1994). Data analysis revealed that nonemployment income comprised nearly one-third of all personal income, both in Michigan and the United States (Kendall and Pigozzi 1994).…”

“…Because of this, nonemployment income can be interpreted as a form of basic income. Even though employment income comprises a significant fraction of personal income, nonemployment sources did exhibit growth over the latter half of the 20th century (Forward 1990;Kendall and Pigozzi 1994;Manson and Groop 1988). This growth in nonearnings income has rendered rural communities dependent on it as a primary source of personal income.…”

“…A disruption to this type of income would undoubtedly impact a dependent community's viability. We follow the reasoning of Nelson (2005) and Kendall and Pigozzi (1994), and maintain that nonemployment income functions akin to a resource community's basic income, because they are both derived from external sources, and because they both render the community vulnerable to external changes in markets or policy. The role of nonemployment income in rural communities has received much less attention in the literature than the role of extractive-resource income in those same communities.…”