(contributors: Don Lacombe, RRI Research Associate Professor; Gianfranco Piras, RRI Affiliate, The Catholic University of America; Juan Sayago-Gomez, RRI Graduate Research Assistant, Economics; Caleb Stair, RRI Graduate Research Assistant, Resource Economics; and Randall Jackson, Geology and Geography Professor and RRI Director. Reprinted in whole with permission from WVUToday.)
MORGANTOWN, West Virginia — A report compiled by two West Virginia University organizations shows that the 13-state Appalachian region of the U.S. has experienced substantial economic impact, progress and significant development challenges since the creation of the Appalachian Regional Commission (ARC) in 1965.
The two WVU organizations, along with a national research and consulting firm, initiated a study last year to assess the impact of the ARC on the region it serves. That report shows a much improved Appalachian region, but one that also has work to be done.
The report, Appalachia Then and Now: Examining Changes to the Appalachian Region Since 1965, was prepared by the Bureau of Business and Economic Research (BBER) in the College of Business and Economics and the Regional Research Institute (RRI), both from WVU, and the Center for Regional Economic Competitiveness (CREC), a nonprofit research organization based in Arlington, Virginia. The report was released this week, but also during the year of ARC’s 50th anniversary.
“The Appalachian Region has gone from 295 high-poverty counties in 1960 to 107 today,” said ARC Federal Co-Chair Earl F. Gohl of regional improvements noted in the report. “The region’s high school graduation rates have increased to being almost on par with the nation’s, infant mortality has plummeted, availability of potable water has gone up, and more than 2,000 miles of new highways have been built and opened since President Johnson made his historic 1964 visit to Martin County, Kentucky.
“The challenge going forward is to use the region’s assets: a history of hard work, innovative solutions to complex problems, and strong families and communities to leverage today’s emerging economic opportunities into a diverse and vibrant economic future.”
Several governors had high praise for the positive findings in the report and the achievements of ARC to date, including West Virginia Governor Earl Ray Tomblin. West Virginia is the only state that lies entirely within the geographic region served by the ARC.
“I’m pleased with the work we’ve done not only to strengthen West Virginia’s business climate, but also to improve the quality of life for everyone in the Appalachian Region,” Tomblin said. “As this report indicates, we’ve made great progress, but there is still work to be done.”
ARC is a regional economic development agency that represents a partnership of federal, state and local government, and was created in 1965 with the passage of the Appalachian Regional Development Act. A broad, bipartisan coalition in Congress approved the legislation that year, which was signed into law by President Lyndon B. Johnson.
The project examined socioeconomic trends in Appalachia, analyzed the economic impacts of numerous ARC economic development programs, and determined the perceptions of local stakeholders regarding past impacts and future directions of ARC programs. The three-agency research team brought together nationally recognized expertise in: regional quantitative and economic impact analysis; economic development policy design and implementation; economic development program evaluation; and local and regional economic development strategic planning. All of the senior researchers on the team also have direct experience working in Appalachia, as well as in rural and distressed communities elsewhere.
“This research will help identify which economic development strategies are most effective, and will ultimately help the ARC and others design stronger economic development strategies in the future,” said BBER Director Dr. John Deskins.
Deskins emphasized the importance of examining the effectiveness of ARC’s involvement in the 205,000-square-mile region that follows the spine of the Appalachian Mountains from southern New York to northern Mississippi. The Appalachian Region includes all of West Virginia and parts of 12 other states: Alabama, Georgia, Kentucky, Maryland, Mississippi, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee and Virginia.
Randy Jackson, geology and geography professor and RRI director, said that while it focuses on the 13-state ARC region, the ARC impact also extends far beyond its own geographic boundaries. “We have an opportunity here to assess and develop a really deep and comprehensive understanding of the tangible effects of ARC’s regional economic development programs,” said Jackson.
Statistics show that 42 percent of the region’s population is rural, compared with 20 percent of the national population.
Major points of the study, as noted by ARC, are as follows:
* Poverty has been cut in half in Appalachia; the rate has dropped from nearly 31 percent in 1960 to 16.6 percent today.
* Only 3.2 percent of Appalachian houses today still lack complete plumbing, as compared with 2.0 percent nationally, a stark improvement from the nearly 14 percent lacking complete plumbing in 1970.
* Infant-mortality rates have dropped by more than two-thirds in Appalachia, moving much closer toward parity with the rest of the nation. But overall mortality rates are also up in the Region, while they continue to fall in the rest of the country.
* The Region has achieved near-parity in high school graduation rates, an important accomplishment; but Appalachia remains behind in post-secondary educational attainment.
* Major progress in reducing the Region’s isolation has been achieved through construction of the Appalachian Development Highway System (ADHS) connecting Appalachia to the Interstate Highway System. As of September 2014, a total of 2,762.9 miles, or 89.4 percent of the 3,090 miles authorized for the ADHS, were either complete or under construction.
* Total economic impacts on the Region of completing the ADHS would, by 2035, result in the creation of an estimated 80,500 jobs, $5 billion in increased value-added production, and $3.2 billion in increased wages for Appalachian workers. At the national level, the estimated return on investment yields $3 for every dollar invested.
* Since 1965, ARC has funded nearly 25,000 strategic investments in nonhighway activities in the Region; funding for these investments included $3.8 billion in appropriated ARC funds and $9 billion in matching funds from other federal, state, and local funding sources.
* Since 1978, ARC-financed nonhighway investments in Appalachia have attracted nearly $16 billion in leveraged private investment, an average of $6.40 in private-sector financing for each $1 in funds invested by ARC. The ratio reached nearly 10 to 1 in the period 2007–2012, and nearly 15 to 1 in 2013.
* Over the last five decades, ARC’s investments have helped create nearly 312,000 jobs and $10 billion in added earnings in the Region. On average, annually, these ARC funds supported an estimated 6,364 jobs and $204 million (in constant 2013 dollars) in earnings.
* A rigorous quasi-experimental research method indicates that ARC investments helped counties add employment at a 4.2 percent faster rate and increase per-capita income at a 5.5 percent faster rate than similar counties outside of the Region that did not receive ARC investments.
* Since the 2008–09 recession, the Region’s unemployment rate has tracked the U.S. rate closely, with a few persistent pockets of joblessness, similar to the rest of the country.
* The Region is becoming less reliant on employment from resource-extractive and goods-producing sectors and more dependent on the service sector for employment.
* As late as 1970, 16.2 percent of area homes did not have access to phone service, compared with 13 percent of households nationally. By 2012, the proportion of households without phone services in the Appalachian Region was about 2.8 percent, very nearly the same as the national average of 2.5 percent.
* Appalachia trails significantly in the affordability of Internet service, as well as in access to high-speed broadband, especially at the household or business-unit level.
* There has been a steady outmigration of adults between the ages of 18 and 35 from the Region for access to jobs and other opportunities.
The full report is available on the ARC website at www.arc.gov.
About the partners
The Appalachian Regional Commission (ARC) is a regional economic development agency that represents a partnership of federal, state, and local government. Established by an act of Congress in 1965, ARC is composed of the governors of the 13 Appalachian states and a federal co-chair, who is appointed by the president. Local participation is provided through multi-county local development districts.
The Regional Research Institute (RRI) at West Virginia University (WVU) promotes scholarly research focusing on theories and history of regional development, methods for studying regions, and policies for stimulating their development.
The Bureau of Business and Economic Research (BBER) at West Virginia University (WVU) provides the state’s business and policymaking communities with reliable data and rigorous applied economic research and analysis that enables the state’s leaders to design better business practices and public policies.
The Center for Regional Economic Competitiveness (CREC) is an independent, not-for-profit organization founded to provide policy-makers from around the world with the information and technical assistance they need to formulate and execute innovative, regional, job-creating economic strategies.