Title of Presentation or Performance
Local Economic Impact of State Farm’s 1,600 Position Relocation
Type of Submission (Archival)
Event
Expected Graduation Date
2015
Location
Center for Natural Sciences, Illinois Wesleyan University
Start Date
4-18-2015 2:00 PM
End Date
4-18-2015 3:00 PM
Disciplines
Economics
Abstract
The presence of State Farm Insurance is a vital aspect of the Bloomington-Normal economy, so the announcement of the relocation of 1,600 local positions to an Atlanta hub has been a major cause for concern in the community. In this project I aim to quantify the local economic impact of this elimination and compare it to a shock of similar magnitude represented by a decrease in Mitsubishi’s local operations in 2004. IMPLAN multiplier analysis is used to obtain estimations of primary and secondary impacts of both shocks. IMPLAN’s calculations are based on input-output tables, which is necessary to prevent underestimating the impact by excluding economic losses realized in a “chain reaction” to an economic shock. It is found that, although State Farm’s closure results in losses among several sectors, the community should experience a smoother recovery than after the closure of Mitsubishi’s second production shift a decade ago.
Local Economic Impact of State Farm’s 1,600 Position Relocation
Center for Natural Sciences, Illinois Wesleyan University
The presence of State Farm Insurance is a vital aspect of the Bloomington-Normal economy, so the announcement of the relocation of 1,600 local positions to an Atlanta hub has been a major cause for concern in the community. In this project I aim to quantify the local economic impact of this elimination and compare it to a shock of similar magnitude represented by a decrease in Mitsubishi’s local operations in 2004. IMPLAN multiplier analysis is used to obtain estimations of primary and secondary impacts of both shocks. IMPLAN’s calculations are based on input-output tables, which is necessary to prevent underestimating the impact by excluding economic losses realized in a “chain reaction” to an economic shock. It is found that, although State Farm’s closure results in losses among several sectors, the community should experience a smoother recovery than after the closure of Mitsubishi’s second production shift a decade ago.