The Impact of New Employers From the Outside, the Growth of Local Capitalism, and New Amenities on the Social and Economic Welfare of Small Towns

The purpose of this study was to determine if the outcomes of economic development result in the anticipated economic and social benefits.The authors differentiated between the proximal outcomes of development (e.g., attracting a new employer) and their distal outcomes (e.g., increased employment and income). Indicators of economic change from secondary sources were merged with primary data from resident surveys and key informants’ interviews for 99 small Iowa towns for the analyses. Findings show that the opening of absentee-owned employers had positive economic benefits compared to the situation in other similar towns. However, it was not accompanied by gains in quality of life. The growth of local capitalism was associated with more positive quality of life outcomes. New amenities were not associated with economic or quality of life changes.