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A comparison of military base closures in metro and nonmetro counties.

In counties where military bases were closed from 1969 to 1988, two-thirds of the communities regained as many civilian jobs as were lost, but these outcomes varied considerably between counties located in metropolitan areas and those in nonmetropolitan areas.

Since 1961 more than 100 military bases have been converted to civilian use. An additional 121 bases are slated for closure, according to the 1988 and 1991 reports of the Defense Secretary's Commission on Base Realignment and Closure. Fewer than 50 of the 121 bases slated for closure are major bases.

Military facility shutdowns in all communities--both rural and urban--generally create fear and resistance among local residents and their elected officials. As with the loss of any major employer, job and income losses and the resulting damage to the local economy become the central focus. In addition, on-base health care services for military personnel who choose to resign and remain in the area, as well as for local military retirees, are lost. Finally, severe reductions in local school enrollments can occur. The economic damage may be worse in rural communities with their typically smaller, less-diversified economies.

On the other hand, closed military facilities with land, buildings and physical equipment often are provided to communities at little or no cost. These assets can prove valuable in redeveloping the base after the military leaves, especially in rural communities with few resources. The redevelopment may be more beneficial to the local economy than the base activities it replaces.

This report examines economic changes in selected counties where one or more military bases closed during the 1960s, 1970s and early 1980s. Comparisons are made between metro and nonmetro counties where bases closed and between these base-closing counties and their respective (metro and nonmetro) national means. Nonmetro counties are those counties that are not included in a Metropolitan Statistical Area, as defined by the Bureau of the Census, U.S. Department of commerce, as of 1983. The terms "nonmetro" and "rural" are used interchangeably in this report, as are "metro" and "urban." The analysis should give local officials and policy makers valuable information with which to assess the likely effects of base closures and to plan for conversion.

Previous Studies

The authors' review of previous studies of military base closings and conversions highlighted the following conclusions.

* The effects of base closure on a community vary depending on several factors. The factors include level of dependence by the local economy on the base, the general economic climate at time of closure (that is, expansion or contraction of the national economy), the size of the base, the region of the country (which is essentially a proxy for fundamental factors, such as climate or culture), the preparedness of the local community for conversion and other characteristics of the local community (such as, whether metro or nonmetro) all affect the outcome of base conversion.

* Rural areas face special problems when a military base closes. Because of their typically smaller size and less-diversified economies, rural areas are assumed to suffer more from base closure than urban areas. In fact, rural areas have shown a wide range of success in dealing with base closures--ranging from successful redevelopment of the closed facilities to no redevelopment at all.

* The amount of time it takes a community to acquire base facilities after closure affects economic recovery. On average, nonmetro counties acquired facilities slightly faster than did metro counties (2.2 years versus 2.5 years). Acquisitions took as long as 13 years for two nonmetro counties and nine years for two metro counties.

* Some factors that affect the length of acquisition time can be identified. Prolonged battles to keep a base from closing often delay preparations for conversion of the base when and if it ultimately closes. Land use regulations--zoning designations, subdivision requirements--also can impede conversion and consequently slow redevelopment. Finally, the larger size and often more complex organization of metro governments, coupled with a greater sense of urgency on the part of nonmetro counties to replace bases and, thus, bolster their smaller, more TABULAR DATA OMITTED specialized economies, may have given a slight edge to nonmetro counties.

Employment Losses

In this analysis, two types of employment losses are examined--civilians employed on base whose jobs were eliminated and military personnel who were transferred to other facilities. The two are treated separately because the multiplier effect of each in the local economy differs. Military personnel typically have a lower multiplier effect within the local economy because they purchase or obtain many goods and services (including housing) on base, rather than from local providers. The analysis does not attempt to quantify the indirect effects of base closure on local employment. The study's data are incapable of presenting an accurate view of this relationship.

Exhibit 1 presents data on employment losses and additions for metro and nonmetro counties. The average number of civilian jobs lost on base was much higher in metro than in nonmetro counties. The 18 bases with the greatest losses were all in metro counties--pointing to the larger size of metro base facilities. Average job losses due to transfers tended to be even between metro and nonmetro categories, with nonmetro counties losing slightly more on average.

Because of differences in the multiplier effect, the loss of civilian jobs on base is more damaging to a local economy than the loss of transfers. The higher proportion of transfers in the nonmetro counties may mean that some of the negative effects of closure were mitigated in nonmetro counties. The average nonmetro community was relatively less dependent, in terms of direct employment, on the closed base than the average metro base-closing community. Even though the multiplier effect may be mitigated, the multiplier effect can be, and likely will be, higher in nonmetro than in metro areas. Particular multiplier effects of job losses depend on the type of base facilities (for example, personnel housing and post exchange) and the base's proximity to the community.

These absolute numbers of lost civilian on-base jobs and military transfers say little about the effect on the county's economy because they are not expressed relative to the size of that economy. This problem is addressed by standardizing job losses and transfers by dividing them by total county employment in the year of closure. The average percentage of total county employment lost through on-base civilian job cuts and military transfers in the year of the closure are shown in Exhibit 2. (The figures represent only those bases closed after 1969 because county employment data are unavailable prior to that year.)

Nonmetro counties did significantly worse than metro counties, losing an average of 3.25 percent of total county employment to civilian on-base job cuts, while metro counties lost only 1.32 percent. Seven of the eight top civilian on-base job losers relative to total employment were nonmetro counties. In terms of military transfers, the average percentage of total county employment lost through transfers in nonmetro counties was more than double that of metro.

Combining the two types of losses (while remembering that the two types have different effects on the local economy due to differences in the multiplier effects), the average nonmetro base-closing county lost nearly 10 percent of its total county employment, compared with less than 4 percent for metro counties. At the extreme, the worst nonmetro and metro counties each lost roughly 34 percent of total county employment.

These data point to the obvious fact that nonmetro counties had smaller total county employment in the year of base closure than did metro counties. The smaller total employment figure meant that job losses (although absolutely smaller in nonmetro counties) constituted a larger percentage of total employment in nonmetro counties and, thus, reflected a larger relative dependence of the local economy on the military base.

Employment Gains

As was the case with job losses, more than twice as many new jobs were added on the former base facilities in metro counties than in nonmetro counties. The nine leading former bases in absolute number of jobs gained when the base was converted to nonmilitary use were in metro areas, as were 15 of the top 20.

The strongest test, in this analysis, of on-base recovery is the number of lost civilian jobs on base that were regained--net employment change. In terms of net employment change, nonmetro counties fared slightly better, recouping 299 percent of lost jobs on average, while metro counties recouped 168 percent.

These averages are deceiving, however, because only two-thirds of all counties (70 percent of nonmetro and 68 percent of metro) regained as many or more civilian jobs as were lost on their former base. Thus, the remaining one-third suffered net reductions in on-base employment, with some suffering severe net reductions.


As with the loss of any major employer, the closure of a military base can harm its host community. The assets of a closed military base--land, buildings and physical equipment--are often provided to the local community at little or no cost. Such assets, wisely and strategically used, can often lead to redevelopment of the local economy, making it stronger than before the base closed. Among the counties cited in Exhibit 3 are many where more jobs were gained following a base closure than were lost.

The success of military base conversion depends upon such factors as the attributes of the particular facilities involved, the amount and quality of planning for conversion, the characteristics and health of the local economy--as well as the regional and national economic climate, and the extent of the local economy's dependence upon the base.

Comparisons between metro and nonmetro counties where bases closed, and between these base-closing counties and their respective (metro and nonmetro) national means reveal the following conclusions.

First, nonmetro base-closing counties lost more than twice as large a proportion of total county employment through civilian on-base job cuts as did metro base-closing counties (3.25 percent versus 1.32 percent). In terms of military transfers, nonmetro counties also lost more than double the percentage of county employment experienced by their metro counterparts. Combining the two types of job losses (while noting that the two types of losses have different multiplier effects), the average nonmetro base-closing county lost nearly 10 percent of its total county employment, compared with only 4 percent for the average metro county. So, regardless TABULAR DATA OMITTED of the measure used, nonmetro counties are more severely affected by base closings than are the metro counties.

Second, two-thirds of base-closing counties (70 percent nonmetro and 68 percent metro) regained as many civilian jobs as were lost. The picture for nonmetro counties worsens dramatically if military transfers are included.

Third, employment growth in nonmetro base-closing counties was only 78 percent of the national nonmetro average. In contrast, metro base-closing counties grew at 90 percent of the national metro average rate.

Fourth, real income growth was relatively and absolutely weaker in nonmetro base-closing counties than in metro base-closing counties. Per capita income growth in nonmetro base-closing counties averaged only 92 percent of the national nonmetro average rate, while metro base-closing counties grew at roughly the all-metro rate. Nonmetro base-closing counties did even worse in total income, averaging only 70 percent of the nonmetro national average. The difference between per capita and total income figures is explained by population growth, which was also slower in nonmetro base-closing counties.

Thus, on all measures analyzed, the average nonmetro base-closing county fared worse than its metro counterpart. The experience of individual base-closing counties (metro and nonmetro) varied widely, depending on a number of factors, mentioned above.

These findings are consistent with conclusions from earlier studies. On average, family income is not significantly affected by base closure although a region's total income and employment may decline. More emphasis should be placed on the fact that not all nonmetro communities do equally well in recovering from a closure. Some did much better without the base; however, many did not.


The Office of Economic Adjustment (OEA) was established in the Department of Defense in 1961 and is part of the President's Economic Adjustment Program. The sole mission of OEA is to help offset adverse economic effects caused by changes in a Department of Defense program, such as base closure.

OEA serves as the professional staff for the Economic Adjustment Program (EAP). The EAP is a community-based approach with four major components carried out in conjunction with other cooperating federal agencies.

1) The Job-Guarantee Program ensures each career civil servant with reassignment to another federal position or a new employment offer.

2) The Property Disposal Program speeds the release of buildings and equipment on the former bases to the host communities, through sale or gift. This allows communities to reuse the facilities in accordance with an economic recovery plan and keep facilities from remaining unoccupied for unnecessarily long periods of time.

3) The EAP identifies local dependents (the local contractor and subcontractor network for the base) and recognizes some of the economic effects off the base.

4) Worker adjustment, the retraining of former civilian base employees, is a mechanism to help former workers in their quest for new jobs.

The OEA assists communities only when asked by the community. It does not impose its interest or influence upon any community but, rather, serves in an advisory role. The local community must make the hard decisions about developing and implementing a plan for redevelopment of the base.

Communities are encouraged to find long-term solutions for their economic needs. "Band-aid" approaches distract the community's attention from redevelopment of the base and are discouraged. For instance, OEA discourages the temporary use by businesses of the facilities on the base, as this would interfere with planning for long-term use.

Surplus military installations also can be used to advance community educational, health and recreational programs, leaving other funds available to be used for people rather than buildings and equipment. Realizing the potential for such reuse, OEA established special procedures to prevent unnecessary dismantling during closure. Personal property (such as desks, chairs and kitchen equipment) useful for community redevelopment of the base is held in place to the extent possible without denying valid military needs. In addition to helping meet a community's social needs, these resources indirectly contribute to a community's economic development prospects.

PETER L. STENBERG is an economist at the U.S. Department of Agriculture's Economic Research Service (USDA-ERS). THOMAS D. ROWLEY is a social science analyst with the USDA-ERS. This article has presented excerpts, with permission of the authors, from their Staff Report No. AGES 9307, published by the Economic Research Service of the U.S. Department of Agriculture. A copy of the complete report is available by calling the authors at 202/219-0542 (Stenberg) or 202/219-0546 (Rowley) or by writing them at USDA-ERS-ARED, 1301 New York Avenue, N.W., Room 324, Washington, DC 20005-4788.
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Title Annotation:includes related article
Author:Stenberg, Peter L.; Rowley, Thomas D.
Publication:Government Finance Review
Date:Oct 1, 1993
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