LOCALIZED EFFECTS OF CALIFORNIA'S MILITARY BASE REALIGNMENTS: EVIDENCE FROM MULTI-SECTOR LONGITUDINAL MICRODATA
December 1998
Working Paper Number:
CES-98-19
Abstract
Cuts in U.S. Department of Defense budgets have led to changes in the personnel levels at military bases throughout the United States. Because these bases are often significant sources of civilian and military employment and also provide customers for local businesses, closing them distresses local citizens, business leaders and politicians. In, Defense Secretary William Cohen launched a new drive to close dozens more military bases. Given the timeliness and magnitude of these actions, and in light of the predictions of hardship surrounding them, it is important to realistically assess the impact of substantial personnel changes at military bases on employment at neighboring businesses. This study utilizes a new and uniquely well-suited confidential dataset to analyze this issue at the level closures' impact are thought to occur: individual establishments and their employees. Using an establishment-level panel dataset that covers all private establishments in California with positive employment from 1989 to 1996, I examine how the employment dynamics of establishments across the full spectrum of industries are affected by personnel changes at nearby military bases and find that despite establishments' growth rates declining, more establishments going out of business and fewer new ones starting, when bases close workers' employment prospects actually improve.
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