The Potential Effects of Increased Demand for U.S. Agricultural Exports on Metro and Nonmetro Employment

Abstract

This report uses a computable general equilibrium (CGE) model to explore the economic effects of a hypothetical 10-percent increase in foreign demand for U.S. agri - cultural exports. This demand shift was found to result in a 6.7-percent increase in the volume of such exports, worth $9.7 billion at 2013 prices, and a net increase in total U.S. employment (all economic sectors) of about 41,500 jobs—above and beyond the nearly 1.1 million full-time civilian jobs that U.S. agricultural exports currently support. Some 40 percent of these new jobs are created in rural (nonmetropolitan) counties. Most parts of the agri-food sector (i.e., production agriculture plus food and beverage manufac - turing) would see an increase in employment, while employment in other trade-exposed industries—most notably non-food-and-beverage manufacturing and mining—would decrease. The agri-food sector’s share of regional employment is the main determi - nant of the percentage change in total regional employment in our simulation. Since the agri-food sector accounts for a larger share of nonmetro employment than of metro employment, growth in U.S. agricultural exports is of greater relative importance to the economic prosperity of nonmetro communities.