Why local economic development is important

So, early childhood programs might have “local economic development benefits”, which means higher local earnings per capita. Why are local economic development benefits important?

First, local economic development benefits are important for political reasons. For cities and states, advancing their own economic development is of central importance. As argued by Harvard political scientist Paul Peterson in his influential book City Limits, “local governments are primarily interested in maintaining the economic vitality of the area for which they are responsible”. Whether ar state or local area can be competitive in the earnings per capita it offers residents is critical to whether the state or local area is able to survive and thrive. State and local public policies always must take into account the goal of local economic development. Some policies directly aim at promoting local economic development. Even policies that aim at other goals (education, public health, public safety, environmental quality) must be pursued in a way that is consistent with continued strong local economic development.

Second, local economic development offers a benefit that is quite valuable to local residents: more and better job opportunities in their home community. Most Americans have strong ties to the familiar places and people of their home community. Some people will of course move if needed to attain greater economic success. But providing more or better jobs in the home community allows local residents to attain greater earnings while preserving their valuable ties to their home community.

As economist Paul Courant has pointed out, “having a place in the local community…is a valuable asset.” This asset is sometimes labeled “a sense of place”. As explained by economist Roger Bolton, “A sense of place [is] a concept widely used by geographers, architects, and planners. It refers to a complex of intangible characteristics of a place that makes it attractive to actual and potential residents… The returns to the sense-of-place asset are a general measure of security – security of stable expectations, and security of being able to operate in a familiar environment and to trust other citizens, merchants, workers, etc…There is also a basic feeling of pleasure at living in a community…that has been created by a combination of social interactions in a particular setting.” Creating more jobs and better jobs in a local community allows more local residents to stay and economically prosper while preserving and enhancing this important component of human well-being, a strong “sense of place”.

Therefore, if research can establish that early childhood programs provide significant local economic development benefits, then early childhood programs gain political support and substantive importance. State and local political leaders, business leaders, and residents are more likely to support investments in early childhood programs if they offer local economic development benefits. From a broader national perspective, if early childhood programs help promote local economic development, then they provide a good that is an important part of the well-being of a nation.

About timbartik

Tim Bartik is a senior economist at the Upjohn Institute for Employment Research, a non-profit and non-partisan research organization in Kalamazoo, Michigan. His research specializes in state and local economic development policies and local labor markets.
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