Fortifying Main Street: The Economic Benefit of Public Pension Dollars in Small Towns and Rural America

Fortifying Main Street:  The Economic Benefit of Public Pension Dollars in Small Towns and Rural America illustrates the impact of benefit dollars from public pension plans according to several different measures: as a percentage of GDP by county; as a percentage of total personal income by county; and by categorizing counties as metropolitan, small town (micropolitan), or rural.

By Dan Doonan, Nathan Chobo and Tyler Bond

July 2022

Click here for more, including a download button for the full report: 

https://www.nirsonline.org/reports/mainstreet2022/

The report finds that a positive economic contributor to these communities is the flow of benefit dollars from public pension plans. In 2018, public pension benefit dollars represented between one and three percent of GDP on average in the 2,922 counties in the 43 states studied.

Authored by Dan Doonan and Tyler Bond from NIRS, along with Nathan Chobo from Linea Solutions Inc., this study builds on previous research and examines data in 43 states from a majority of public pension plans in the states.

The report’s key findings are as follows:

• • Public pension benefit dollars represent between one and three percent of GDP on average in the 2,922 counties studied.
• • Rural counties have the highest percentages of their populations receiving public pension benefits.
• • Small town counties experience a greater relative impact in terms of both GDP and total personal income from pension benefit dollars than rural or metropolitan counties.
• • Rural counties see more of an impact in terms of personal income than metropolitan counties, while metropolitan counties and rural counties see an equivalent impact in terms of GDP.
• • Counties that contain state capitals are outliers from other metropolitan counties, likely because there is a greater density of public employees in these counties, most of whom remain in these counties in retirement.
• • On average, rural counties have lost population while small town counties and metropolitan counties have gained population in the period between 2000 and 2018, but the connection between population change and the relative impact of public pension benefit dollars is weak.

To ensure accuracy, the data for this report was collected directly from each pension plan.

Special note from STRS Board member Rudy Fichtenbaum, who submitted this article and created an excerpt just for Ohio (see the full report)

July 12, 2022

"This would be good to send to all of those legislators in small counties in Ohio. It would also be worth pointing out that every dollar that goes to a retiree will likely be spent because in retirement most people are spending more than they are taking in i.e., they are living off of pensions, Social Security (for those who get it) and retirement savings (for those who have it). This study shows that the pensions are more important to the smaller cities and rural areas (Red areas) than to the big cities (Blue areas)." [Download the full report to view the Ohio maps.]