What are the True Employment and Wage Impacts of Casinos?

Abstract

This dissertations assesses the economic impact of casinos on their host and nearby counties, in terms of net increase in total employment and median weekly wages. The legalization of casino gaming (both commercial and Indian-owned) continues to be debated as state and local governments throughout the United States look for economic development opportunities. Using a long and wide panel data set involving the entire population of U.S. counties, between 1984 and 2013, this study finds that, on average, employment gains are relatively modest, inconsistent across industries, and begin to tail off significantly between four and seven years after a county'sfirst casino opens. Wage gains, however, are on average significant and persistent for at least ten years after casino opening, both for host counties and those that border them. Impacts vary between urban and rural counties, and by industry type (construction, service, and retail) but results follow the expected patterns. Regional models are also estimated. In general, the public should be suspicious of claims that casinos will greatly increase the net total employment in a county, especially for urban/suburban areas, and especially for timeframes greater than 5-10 years. The major question for policymakers and the public to consider is how these impacts compare to other economic development strategies available to them. Further research is needed to compare the projected effects of casinos against the effects of other strategies.