A recent trend in rural development policy emphasizes small business development in place of industrial recruitment. To analyze some of the likely effects of expanding the proportion of small firms in local economies, an empirical wage rate model incorporating employer size was developed, and parameters were estimated using household date from rural Putnam County, Georgia. The estimates indicated that large employers offered higher wages than small employers and that the wage premium they offered was greater for blacks than for whites. These results support Thomas Till's argument that southern rural counties with relatively large black populations should not abandon efforts to attract large employers. Other factors associated with higher wages included level of education, previous labor force experience, and employment in certain occupations and industries.


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