Rural economic development in the United States: An evaluation of the U.S. department of agriculture's business and industry guaranteed loan program

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    7 Scopus citations

    Abstract

    The U.S. Department of Agriculture's Business and Industry (B&I) Guaranteed Loan Program guarantees loans made by rural banks to rural businesses. The author evaluates B&I's effectiveness in increasing employment using basic ordinary least squares (OLS) and propensity score matching models. The author finds a robust association between loan reception and increased employment growth. A loan of $1,000 per capita is accompanied by a 3% to 6% increase in employment-per-capita growth and a 3% to 5% decrease in earnings-per-worker growth over the 2 years after the loan, leaving the effect on total county earnings indeterminate. The author concludes that the B&I loan program subsidizes loans associated with increased employment growth, although the jobs created are lower paying than average.

    Original languageEnglish (US)
    Pages (from-to)229-241
    Number of pages13
    JournalEconomic Development Quarterly
    Volume23
    Issue number3
    DOIs
    StatePublished - Aug 2009

    Keywords

    • Guaranteed loans
    • Program evaluation
    • Rural economic development
    • USDA

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