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The Army's Local Economic Effects

by Christopher M. Schnaubelt, Craig A. Bond, Frank Camm, Joshua Klimas, Beth E. Lachman, Laurie L. McDonald, Judith D. Mele, Paul Ng, Meagan L. Smith, Cole Sutera, Christopher Skeels

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Research Questions

  1. What is the direct Army spending for each congressional district?
  2. What is the total Army employment in each district?
  3. What additional economic output is generated by national-level Army spending at the district and state levels?
  4. What additional jobs are created by national-level Army spending at the district and state levels?
  5. What is the Army-driven economic output for each district and state?

This report presents findings on the economic activity supported by total Army spending in each of the 435 congressional districts in fiscal years 2012–2014. To estimate this activity, researchers used district-level input-output (I/O) models and a national-level I/O model known as IMPLAN. Each district-level model is used to estimate the direct, indirect, and induced effects of national-level Army spending that affects a particular district. In this context, direct effects are the total Army spending within a district; indirect and induced effects represent the local economic activity that supports both the direct spending and the in-district demand generated from Army spending outside the district. Indirect effects capture interindustry linkages, while induced effects capture the effects of household incomes.

For each congressional district, this report provides the following estimates:

  • Direct Army spending (including military and government civilian payroll and retiree pay for Regular Army, Army National Guard, and U.S. Army Reserve, plus acquisition and services contracts)
  • All Army employment (including military and government civilian personnel for Regular Army, Army National Guard, and U.S. Army Reserve, including soldiers not on active duty)
  • Additional economic output generated by direct Army spending
  • Additional jobs created by direct Army spending
  • Army-driven economic output (direct plus indirect and induced spending)
  • All Army employment plus estimated additional jobs resulting from total Army direct spending and indirect effects.

Results are aggregated by state and the economic activity associated with Army spending is separated by component where applicable.

Key Findings

Median Army Spending per Congressional District is $121 Million

  • In FY 2014, the Army directly spent approximately $121 million in the median congressional district (in 2012 dollars) and $1.7 billion in the median state, with considerable variance across the local economies.
  • This direct spending and the intermediate demands generated by out-of-district/out-of-state spending contributed a total of $375 million of economic output to the median congressional district and $5.5 billion to the median state.
  • Measured in terms of employment, the economic effect translates into about 4,200 jobs for the median district and just over 62,000 for the median state, with a wide range across economies.
  • The report provides results that are broken down by congressional district, as well as aggregated by state, and the economic activity associated with this spending is separated by Army component where applicable.

Table of Contents

  • Chapter One

    Introduction

  • Chapter Two

    Methodology

  • Chapter Three

    Data Sources

  • Chapter Four

    Results

  • Chapter Five

    Conclusion

  • Appendix A

    Preprocessing of Direct Army Spending Data

  • Appendix B–1

    Alabama—Minnesota (available separately)

  • Appendix B–2

    Mississippi—Wyoming (available separately)

Research conducted by

This research was sponsored by the U.S. Army, G-8, and conducted within the Strategy and Resources Program, a part of the RAND Arroyo Center.

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