1978 DOE SPS Economic Demographic Issues

population growth, suburban population growth, manufacturing employment growth, and nonmanufacturing employment growth. This study examines Standard Metropolitan Statistical Areas (SMSAs) in and near the North Central Census Region for both the 1950-1960 and 1960-1970 decades. Santini’s results strongly support the export-base theory and they demonstrate the importance of characterizing migrants and non-migrants separately if export-base modeling is to be done correctly. It is described in Sec. 3.2 how the Argonne Social and Economic Assessment Model (SEAM) implements export-base theory to predict population growth from economic development (i.e., the creation of jobs). 3.1.1 The Muth Model Muth cites Borts and Stein1 as the original proponents of the theory that population growth causes employment growth. As examples of the exportbase theory, he cites Blanco,1* Mazek,5 and Lowry.6 In the export-base models cited by Muth, it is the concept of potential unemployment that is supposed to be the cause of migration. Potential unemployment is the amount that would have existed at the end of the period had there been no migration. To test the hypothesis that population growth causes employment growth, it is necessary to distinguish between natural increase in the labor force due to local entrants (natural increase), and increase due to migration. Muth estimates the natural increase and subtracts it from total labor force increase to compute an estimate of migration into the labor force. Muth then presents a two- equation model in which his estimates of migration into the labor force and total employment growth are the independent variables of the two equations. Natural increase of the labor force is treated as an independent variable in both equations. Based on the test results of this model, Muth found it difficult to accept the export-base theory as a fundamentally correct description of the urban growth process. On the other hand, while his results provided more support for the Borts and Stein hypothesis than for the export-base theory, he could not (and did not) assert that his results supported Borts-Stein to the exclusion of export-base effects. In short, he implied that neither theory provides an accurate description of the growth process. 3.1.2 The Santini Model The Santini model3 is similar to the Muth model in the sense that it simultaneously estimates employment and population growth. The most important difference between the two models is that Santini disaggregates employment

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