Phase 1: Economic Development

Gross assessed value (see map) is the total market value of all the real properties (land and buildings) at a point in a given year. This includes residential developments, commercial developments, industries and businesses, agriculture, and until recently business inventories too. As of 2006-2007, Indiana has fully exempted inventories from value assessments.

A higher assessed value could mean that more real property has been developed, and/or the quality of the development (real estate) is high. The assessed values are used for property tax assessments, however increased assessed values do not necessarily lead to increased property taxes due to Indiana’s regulations limiting property tax growth in a year. The latest gross assessed values for the year 2005 paid in 2006 are available for all counties in Indiana but for the Brown County. Similarly, tax districts assessed value data (see map) show variations within counties.

Employment center is a general term often used to describe the concentration of jobs in a particular area. Researchers have studied the distribution of employment centers, such as central business districts within a city, or suburban employment centers and office parks within a region. At the level of a metropolitan area or a larger region, one or more than one community may serve as an employment center and also function as a hub of economic, social, and cultural activities.

It is useful for communities to know about their employment levels, employment densities, and commuting patterns. The jobs available within a county and its neighboring counties impact commuting patterns for jobs also known as the journey-to-work flow patterns. The total employment map (see map) shows the total number of full- and part-time jobs available in a county. Indiana’s median employment level is shown for comparison purposes. Similarly, distribution of jobs within a county is shown by the zip code employment map (see map). Communities can study areas of higher concentration of employment within a county. It should be noted that zip code employment levels are by the Zip Code Tabulation Areas (ZCTA), a comparable geography prepared by the U.S. Census Bureau. Similarly, unlike the Bureau of Economic Analysis (BEA) data counting full- and part-time jobs from all sources at the county level, zip code level employment is from the Zip Code Business Patterns, which only contains private businesses, industries, and some government jobs.

A county with a higher employment level might also have more population and workforce thus decreasing the employment densities. This means on average fewer jobs are available per person or worker. In such cases, it is likely that resident workers might be commuting to other counties for job purposes. The employment density maps of jobs per 1,000 population (see map) and jobs per 1,000 labor force (see map) indicate the concentration of jobs with respect to residents and the labor force. It is likely that a county with more jobs per 1,000 population and/or jobs per 1,000 labor force might be an employment center for its region with more people commuting into the county than commuting out of it for job purposes.

The net commuting map (see map) shows the commuting patterns and if a county is attracting or sending commuters. If the net commuting values are positive, more people are coming into the county than going out for job purposes. Several counties in Indiana attract more in-commuters than the out-commuters. Notable examples are Marion, Elkhart, and Vanderburgh Counties, which also serve as employment centers in their regions. On the other hand, several counties serve as bedroom communities where people choose to live and commute to neighboring counties for job purposes. The commuting patterns are an important element and first step in delineating labor market areas. It should be noted that counties located along the border of Indiana might have commuting ties with counties located in the neighboring state.

According to the Bureau of Economic Analysis, in 2005 the three major (private) industry sectors by employment in Indiana were manufacturing (585,556 jobs); retail (416,975 jobs); and health care and social assistance (360,785 jobs). The government and government enterprises sector, which includes federal civilian, military, state and local government jobs constituted the second largest sector after Manufacturing with 439,733 jobs. The employment maps for manufacturing (see map), retail trade (see map), and health care and social assistance (see map) by counties show the percent share of employment in each of the three leading sectors. Communities can compare how they are faring with respect to neighboring or peer counties in employment distribution in these sectors. Note that in addition to three leading sectors, employment data for the remaining16 North American Industry Classification System (NAICS) 2-digit codes is available here.

It is useful for communities to know about their employment distribution. A particular county might have an industry mix similar to the State’s industry mix, with manufacturing, retail, and health as prominent sectors - or the county might have a concentration of jobs in a unique industry sector. For example, the distribution of manufacturing employment shows that northeast Indiana counties have a concentration of manufacturing jobs. By comparison, the leading industry sector in Dearborn County is arts and entertainment followed by retail and manufacturing. Knowing which industry sectors predominate in each county and region would help in targeting industry specific policies.
 

One of the overarching goals of economic development is prosperity for all. It is also one of the most difficult goals to achieve. Community economic development includes examining social and economic disparities and planning strategies to bridge the gaps. Another aspect of planning and implementation is that there should be equitable distribution of benefits as well as losses and no part of the society should bear an undue burden because of public policies and programs. Environmental and social justice studies are required in every program or project using federal funds.

Unemployment, poverty, income distribution, wages and workforce participation are a few important issues in communities. The unemployment map (see map) shows unemployment levels in a county according to the Local Area Unemployment Statistics (LAUS) program. A decreasing unemployment rate shows recovering or prospering economies and vice versa. Unemployment often leads to poverty as lack of a livelihood brings some households below the poverty level making them dependent on welfare programs. County officials and other stakeholders can become informed about persons below the poverty level by examining the poverty (see map) data available through the Small Area Income and Poverty Estimates (SAIPE) program.

The labor force participation rate (see map) is another indicator providing information about county and regional workforces. This rate tracks the percent of working age population who are in the labor force, including those employed and those who are seeking employment. A lower rate of labor force participation might indicate more disabled persons or others who cannot be part of labor force due to other reasons. The student population is one such group. The lower participation rates in Tippecanoe, Monroe, and Delaware Counties might be explained due to the higher number of resident students in these counties.

It is useful for a community to be informed about the distribution of average wages (see map) in the region. Higher wages attract economic migrants such as those who move for better and higher paying job opportunities. The higher wages is also an indicator of better paying occupations in the county. Residents earning higher wages bring greater tax revenues to the communities, create demand for better services, and enhance the quality of life and standard of living by their purchasing power.

The increased demand for goods and services create direct and indirect economic impacts by increasing the industry outputs and purchases and sales within the industries. This results into increased wages for the workers and/or more number of jobs in those industries. The spending by those workers creates additional demand of goods and services and thus induced economic impacts in the communities. Any additional demand of one dollar either from outside or from within the community has a rippling effect throughout the local economy.

By contrast, lower wage jobs may be an indicator that policy makers should target for workforce education and examine more closely the structure of the local and regional economies to see how it can be improved.
 

Economic recessions do happen, and the effects may be more severe in some counties than in others, even within the same state. Some communities and industries have the ability to recover from economic shocks such as a prolonged recession and some have a more difficult time. Studies have revealed that the more diversified economies have better chances of recovering from an economic shock. The “economic diversification” index (see map) measures diversification or distribution of employment shares in different industry sectors. If jobs are distributed equitably across several different industry sectors, the community’s economy is more diversified and vice versa. The economic diversification index does not depend on the employment base but how the employment is distributed across different industry sectors. Even a county with a small employment base might show a higher index value or a more diversified economy while a county with a large employment base but a greater concentration of jobs in only one industry sector will show a lower index value.

On a technical note, the economic diversification index used here is known as the Shannon and Weaver’s index or an entropy index. It is based on estimating the proportion of employment by industry sectors in each county and calculating the natural logarithms of those proportions. The proportion values of industries are multiplied to their natural logs and final index value is a summation of all the industries. In a perfectly diversified economy, the employment will be distributed equitably in all the 13 industry sectors and that brings the maximum index value to 2.56 whereas in a perfectly concentrated economy, all the employment will be in one industry sector and that brings the index value to zero. The index value for Indiana counties vary from 1.90 to 2.38 with no county achieving a value of 2.56, which is an ideal condition. For easy understanding, the index values are divided by the maximum value of 2.56 to develop a scale from 0 to 1. The closer a county index is to 1, the more diversified is the economy in the county.

As an example, Boone, Marion, and Hendricks counties have the index values of 0.93 in Indiana. Whereas counties in the northeast Indiana (Elkhart, Kosciusko, Lagrange, Noble, and DeKalb) that showed a higher concentration of manufacturing employment have low economic diversification index values. It can be seen in the manufacturing employment map, the major shares of employment in those counties are concentrated in the manufacturing sector.