PLANT CLOSURES

When large corporations discontinue branch plant operations, the effects can often be devastating for employees, their families, and communities. Although much is known about the economic effects and social costs of large plant shutdowns, few attempts have been made to simulate these effects on workers, families, and communities. Microsimulation, a modeling method that examines system change using individuals as the fundamental building blocks, offers the possibility of examining all three units within a consistent modeling framework that incorporates primary, secondary, and subsequent induced system changes on individuals, family structure and community development. This paper describes some of the key components of a spatial microsimulation model called SVERIGE (System for Visualizing Economic and Regional Influences Governing the Environment). The model is used to simulate the economic, social, and geographical effects of the shutdown of a significant manufacturing facility, the Saab automobile plant in Trollhättan, Sweden.

Sources:

Rephann, Terance, Kalle Mäkilä, and Einar Holm. 2004. Microsimulation for local impact analysis: An application to plant shutdown. Forthcoming in Journal of Regional Science.

Rephann, Terance and Kalle Mäkilä. 2002. Simulating the effects of plant shutdown on workers, families, and communities. Paper presented at the 42nd Annual Meeting of the Southern Regional Science Association on April 10-12, 2003 in Louisville, KY.

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