Exploring the interrelationship between local employment and income in gateway communities in the US Lake States: empirical evidence from spatial simultaneous equation models

Few empirical studies have examined whether recreational tourism industries have replaced resource extraction industries as the primary drivers of economic growth in gateway communities. This study investigates the relative impacts of tourism and resource-based industries on the local development of gateway communities by employing a spatial simultaneous equations model with data from 4426 Minor Civil Division (MCDs) in the US Lake States. The results suggest that the transition to a service-based economy has occurred in the gateway communities of the US Lake States and is a key contributor to employment growth. In contrast, the resource extraction and construction sectors have contributed to median household income growth, reflecting the benefits of multifunctional rural landscapes.