ECONOMIC IMPACT OF OUT-SOURCING FROM STATE AGENCIES IN BISMARCK TO RURAL NORTH DAKOTA

Randall S. Sell and F. Leistritz

No 23082, AE Series from North Dakota State University, Department of Agribusiness and Applied Economics

Abstract: This investigation of the potential savings to the State of North Dakota because of reduced office space and labor costs and alternatively, the potential benefits to rural communities of increasing employment by adding some state agency jobs was stimulated by Senate Concurrent Resolution No. 4006, which directed the Legislative Council to study state agency office space needs to determine the feasibility and desirability of transferring state agencies or state employees to rural areas. The objective of this analysis was two-fold; (1) determine the cost difference of operating offices in Bismarck versus rural communities and (2) determine the local/regional economic impacts of the potential jobs. The results indicated that development of satellite data processing offices may be a way for the State of North Dakota to save resources by decreasing operating expenses for wages and office rent. The increase in telecommunication costs would not outweigh the benefits. Furthermore, the metro areas of North Dakota do not have an excess capacity in local services (e.g., schools, city services) which means the metro areas are faced with additional investments in public infrastructure that many rural communities would not be faced with. The economic benefits to rural areas could be substantial; a satellite office with 5 employees in Bowman, North Dakota, would have the same relative impact as a new employer with 209 jobs in Bismarck.

Keywords: Community/Rural/Urban; Development (search for similar items in EconPapers)
Pages: 26
Date: 1999
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Persistent link: https://EconPapers.repec.org/RePEc:ags:nddaes:23082

DOI: 10.22004/ag.econ.23082

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