THE ROLE OF LOCAL GOVERNMENT TAX AND EXPENDITURE POLICIES AND NET INMIGRATION ON THE GROWTH OF EMPLOYMENT WITH PARTICULAR REFERENCE TO SELECTED SERVICE INDUSTRIES--AN ECONOMETRIC STUDY OF THE NON-METROPOLITAN COUNTIES OF THE NORTH CENTRAL REGION OF THE UN

The general objectives of this dissertation were to analyze the structural change in employment in the non-metropolitan counties of the North Central region of the United States and to evaluate the contribution of local government tax and expenditure policies to this structural change. In analyzing these characteristics of employment growth, reverse migration of population of the seventies, the population turn-around, was recognized as a simultaneous factor. The study was conducted for the 1962-77 period using a simultaneous equations econometric model.;The sample statistics suggested that during the period under study, the Services sector registered the highest percentage rate of growth followed by the Finance-Insurance-Real Estate and the Manufacturing sectors. Among the disaggregated services industries, the Business services registered the highest rate of growth followed by the health services and the Amusement and Recreation services.;The regression results suggested that changes in local tax rates and public expenditures did not consistently and significantly affect the growth of employment. This implies that local taxes and expenditures have negligible impact on the growth of employment. Net inmigration was not found to have a consistently significant effect on the growth of sectoral employment which suggests that only aggregate employment responds to population migration.;The existence of state personal income tax was found to have a positive impact on the growth of services employment both at the aggregated services sector level and at the disaggregated services industries level. However, in the case of some disaggregated services industries, it was found that an increase in the state income tax rate could offset such benefits. This implies that the magnitude of increase of the state income tax is important.;The major focus of the study was on the Services and Finance-Insurance-Real Estate sectors in comparison with the manufacturing sector. Additionally, three fast-growth disaggregated services industries were analyzed: Business Services, Health Services and Amusement and Recreation Services.;The results of the study generally suggest that tax policies pursued by local and state governments in attracting employment generating industries such as tax abatement, tax holidays and other tax relief measures are not effective.