Industry structure in rural America: The effect of change in industry structure on job loss in the rural counties of the North Central Region

A critical problem facing rural communities is job loss. A major cause is the decline and failure of some rural businesses and the lack of creation of new jobs. Workers who lose their employment and fail to find other employment in the community either commute to work or migrate to the community of their new employment, frequently an urban area.;Even if there is a general consensus that rural communities for the most part are in trouble and failing, yet, there are examples of new activities in some communities to merit the study of the economies of rural communities on a more disaggregated basis. In this research such a study is conducted in rural North Central Region. The region is composed of twelve states.;The purpose of the study is to examine the effect of population-size, per capita income, distance from metropolitan areas, and distance from interstate highway on rural job loss. Also to investigate change in the distribution of employment among various industries in metro and rural counties in the region.;Two major empirical methods were used: descriptive and econometric analyses. The unit of analysis was a county. The various analyses were set on various spatial industrial combinations. They were made at a region, subregion, state level and by economic type county, by adjacency and by counties classified according to traveling hour to metropolitan area or to interstate highway, and employment growth interval. Economic type rural counties were developed using percentage cutoff rule and a discriminant model. Eleven economic sectors were used: farm; agriculture services, fishery, and forestry; mining; construction; manufacturing; transportation and public utilities; wholesale trade; retail trade; finance, insurance, and real estate; service and government.;The findings of this study suggest that while there is great diversity among rural counties of the North Central Region as regards rural employment growth and industry composition, it is difficult to identify factors that in general influence rural growth. The rural counties with employment growth tended to have an increase in share of income and employment from manufacturing. Counties in the East Subregion with employment declines experienced a decline in manufacturing. In the West Subregion rural manufacturing is a minor component. Only in this subregion did proximity to metropolitan area and interstate highway show any importance. In all twelve states population was an important economic factor that determines rural economic growth and failure, especially in the farm and trade dependent counties.