Is Growth in Outstate Missouri Tied to Growth in the St. Louis and Kansas City Areas?

As the state’s largest cities, Kansas City and Saint Louis play an important role in Missouri. More than just being large population centers, these cities provide jobs and serve as key cultural and entertainment destinations, but do they also drive economic growth in the state? This is a key question examined by Howard Wall in his latest report for the Show-Me Institute.

Using household employment data, Wall, a professor of economics at Lindenwood University, tests whether employment growth in the two major cities appears to cause employment growth throughout the rest of the state.

Interestingly, the data show a statistically significant relationship between growth in Saint Louis and outstate Missouri. For example, a one percentage point gain in employment in Saint Louis would lead to a half percentage point gain in outstate Missouri the following year and then smaller gains in the years after that. Wall did not find as strong of a relationship in Kansas City, though the results were not far from being statistically significant.

Why these findings occur is a matter that can be explored further, but the point is clear. Saint Louis and, to a lesser extent, Kansas City are economic drivers for the state. Missourians have a vested interest in seeing sound policies put in place to help these cities flourish.

Click here to read the full report.