Masters Theses

Date of Award

6-1979

Degree Type

Thesis

Degree Name

Master of Science

Major

Agricultural Economics

Major Professor

Thomas H. Klindt

Committee Members

Robert H. Orr, Billy J. Trevena

Abstract

This study utilizes primary data collected from a sample of new rural Tennessee manufacturing plants and employees to investigate the extent to which changes in the family and wage incomes of new employees are affected by individual, family, plant, and community characteristics. The sample data are also used to estimate the primary round impact of new manufacturing employment on the distribution of income and the alleviation of poverty in the sample counties.

Multiple regression analysis is used to identify the relationship between changes in family income resulting from employment in the sample plants and worker, family, plant, and community characteristics hypothesized to influence these changes. The most important variables are those measuring changes in the labor force participation of family members which coincide with employment in the sample plants. Gains in public assistance and other incomes, years of education, plant relative size, and plant relative wage levels have significant direct relationships with income changes, while losses of public assistance and other incomes, county rates of underemployment, return migrant status, and, unexpectedly, plant skill requirements have significant inverse relation ships. Correlations with family labor force participation patterns are identified as explanations for the insignificance of worker age and sex and commuter and migrant status.

Multiple regression analysis is also used to explore the relationship between worker, plant, and community characteristics and changes in employee annual wage earnings. Change in worker employment status at job entry is the most significant determinant of overall wage changes. Employee sex and years of education, change in family size, plant relative size and relative wage levels, plant skill requirements, county rates of unemployment and underemployment, and commuter and return migrant status are also significant determinants of changes in wage earnings. Variations in the degree to which workers are underemployed in previous jobs and in jobs in the sample plants are identified as a consistent explanation for the insignificance of some variables as well as the unexpected inverse relationship between plant skill requirements and income changes.

The primary round distributive impact of employment in new manufacturing plants is described by comparing the incomes of sample families before and after employment in the sample plants to the estimated distribution of family incomes in the sample counties. While the frequencies of families in the middle quintiles of the distribution increases after employment, relatively few of the families are in the lowest income quintile before employment. Local workers compete extensively for income gains with migrating and, especially, commuting workers. Employment in the sample plants enables most previously poor families to escape poverty, but the vast majority of sample families are not previously poor.

The results of the analysis indicate that factors affecting the participation of family members in the manufacturing workforce and the underemployment of rural workers are key determinants of how new manufacturing industry changes incomes and the distribution of incomes in rural communities. The characteristics of new manufacturing plants appear to affect family labor force participation patterns and the opportunities rural workers have to become more fully employed.

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