Measuring the Impact of Meat Packing and ProcessingFacilities in the Nonmetropolitan Midwest: A Differencein-Differences Approach

Considerable controversy exists regarding the costs and benefits of growth in the meatpacking and processing industry in the rural Midwest. This study uses proprietary datafrom the Bureau of Labor Statistics’ Longitudinal Database (LDB) to investigate theeffects of this industry on social and economic outcomes in non-metropolitan counties oftwelve Midwestern states from 1990-2000. A difference-in-differences specification isused to measure how local growth in meatpacking and processing affects growth in localeconomies, government expenditures, and crime rates. Propensity score matching is usedas a check on possible non-random placement of meatpacking and processing plants.Results suggest that as the meat packing industry’s share of a county’s total employmentand wage bill rises, total employment growth increases. However, employment growthin other sectors slows, as does local wage growth. There is some evidence that slowerwage growth swamps the employment growth so that aggregate income grows moreslowly. We find no evidence that growth in the industry changes the growth rates forcrime or government spending.[...]