The growth impact of the metropolitan statistical area designation

The federal Office of Management and Budget’s (OMB) periodic releases of updated metropolitan statistical area (MSA) definitions garner significant attention from local economic development professionals and policymakers. This paper tests the hypothesis that the MSA designation influences local growth, using OMB designations released since 1980 and data on per capita personal income, population, and employment. We find little evidence that the MSA designation influences long-term employment or per capita income growth. However, we do find evidence suggestive of a short-run impact on employment growth and more significant impacts on population growth.