The effects of local economic and environmental policies on county population and employment growth

This study explores the effects of local economic development policies and environmental policies on county population and employment growth in the US. Local environmental policies are policies adopted by counties to control unplanned growth. Using a monocentric city model, growth control is shown to have a negative effect on population growth. The model suggests that optimal growth control policies depend on the policies of neighboring counties, on the strength of agglomeration economies, and on the degree of congestion resulting from population concentration.; Aspatial and spatial analysis are conducted to explore the relationship between population and employment growth. Environmental policies and economic development policies are found to be endogenous, and instrumental variables are used to address this problem. An extended weight matrix is constructed to overcome the problem of spatial discontinuity of the sample data due to nonresponse.; Estimates from the spatial models using the contiguity weight matrix and the inverse distance weight matrix are consistent with expectations. The main findings are: (1) local environmental policies have negative effects on population growth of both metro and nonmetro counties and positive effects on employment growth of metro counties but negative effects on employment growth of nonmetro counties; (2) local economic development policies stimulate employment growth but have no effects on population growth; (3) initial population level has a positive effect on population growth, while initial employment level has nonpositive effects on employment growth; (4) manufacturing industry concentration is negatively associated with employment growth while retailing industry concentration is positively associated with employment growth; (5) population density is negatively associated with population growth but has no effect on employment growth; (6) and people follow jobs and jobs follow people.