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Abstract

This study identifies factors that explain growth in rural areas using data from 618 counties in the U.S. rural heartland. We evaluate many of the growth hypotheses in the context of sectoral employment growth for counties in Iowa, Minnesota, Missouri, Kansas, Nebraska, South Dakota and North Dakota. Separate estimates for rural and urban counties provide insight into factors that are important in explaining employment growth. The results support the importance of human capital as a factor contributing to sectoral employment growth and show that increased concentration and specialization of employment within a county lead to slower growth in the rural heartland counties.

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