THE REGIONAL ECONOMIC EFFECTS OF MILITARY BASE REALIGNMENTS AND CLOSURES IN GERMANY |
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| Authors: | Alfredo R. Paloyo Colin Vance Matthias Vorell |
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| Affiliation: | 1. Ruhr Graduate School in Economics , Ruhr University of Bochum, RWI , Essen, Germany paloyo@rwi-essen.de;3. Jacobs University Bremen, RWI , Essen, Germany;4. RWI , Essen, Germany |
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| Abstract: | We identify the causal effect of a reduction in military personnel on a number of socioeconomic indicators within the peripheries of military bases. The base realignments and closures in Germany are used as an exogenous source of variation that allows us to identify the effect of a demand shock on household income, output, unemployment, and tax revenue within a specified buffer zone around each base. The analysis covers 298 communities for the period 2003–2007. Consistent with evidence found elsewhere, we find that these base adjustments have only a marginal impact on the local community in which the bases are located. |
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| Keywords: | Armed forces Base closure Defense drawdown Demand shock Geographic information system Regional adjustment |
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