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.

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Apr 18th, 2:00 PM Apr 18th, 3:00 PM

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.