Goldwater Study Debunks Worries about Arizona's Growth

Posted on June 06, 2002 | Type: Press Release
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Phoenix, AZ-In a policy paper released today, Goldwater Institute economist Robert Franciosi concludes that Arizona's rapid growth over the past decade has had largely positive effects on the state's economy. His findings contradict the views of many industrial policy advocates, who have expressed concern over the state's growth pattern and proposed what Franciosi calls "a sweeping agenda for activist government."

Franciosi's study makes the following findings:

  • Contrary to dire warnings about a statewide "brain drought," Arizona exceeds the nation in the growth rate of residents with college and advanced degrees. According to the Census, the number of Arizonans with graduate or professional degrees increased by 58 percent during the 1990s, compared to 39 percent for the nation as a whole. The number of Arizonans with bachelor's degrees increased by 50 percent during the 1990s, compared to 37 percent for the nation. 
  • Arizona ranks nineteenth in the nation for total number of students enrolled in degree-granting institutions, and ranks seventh in the ratio of college students to population. 
  • Contrary to the claims of industrial policy advocates, Arizona's economy is well balanced, with an industrial distribution that mirrors that of the nation as a whole. The construction industry's share of state output is 6 percent, compared to 5 percent for the nation as a whole. Manufacturing's share of state output is 14 percent, compared to 16 percent for the nation. 
  • Personal income per person in Arizona is 89 percent of that in the average state. According to a regression analysis conducted by Franciosi, the difference is largely due, in roughly equal parts, to the following factors: (1) Arizona's larger proportion of blue-collar workers, (2) workers' willingness to exchange some pay to live in a warm climate, and (3) the relatively smaller accumulation of human and physical capital in Arizona compared to states with longer histories of development. 
  • Finally, the only proven way for Arizona's government to promote long-term, sustainable growth is to keep its tax and regulatory burdens at a modest level.

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