By Kelsey Corley, Student Editor of The Kayseean
The King Institute for Regional Economic Studies (KIRES) recently released a report that found that government transfer payments were necessary to maintain a significant portion of the regional economy. This study defined transfer payments as “payments made by governments to individuals for which no current production of goods or services is performed,” which includes programs such as Social Security, Medicare, and Medicaid.
Many people would not find this data surprising, as discussions of various stimulus payments have been flooding the news for nearly a year. However, the KIRES study was based entirely on information collected in the 2019 fiscal year, long before the economic difficulties that COVID brought.
The institute conducted the study with the help of King University students Douglas Alves, Suetonius Harris, Samuel Corredor Rincon, and Alex Marzullo Sadre. It found that in Northeast Tennessee, government transfer payments account for 28 percent of the total income of the average household. In Southwest Virginia, that number is even greater at 34 percent, mainly attributable to both the aging population and the recent decline in the coal industry. While it may seem as though this is an over-reliance on transfer payments in the region, KIRES finds these to be beneficial to the local economy, as they bring in income from outside the region.
KIRES co-director, Dr. Sam Evans, predicts that transfer payments as a percentage of overall income will rise exponentially when data is collected from the previous year. “It is going to be such an outlier,” says Dr. Evans, “[in future reports] 2020 and 2021 will probably be marked with an asterisk.”
King’s School of Business founded KIRES in 2012 with three main goals. These goals were to provide a general knowledge of the regional economic developments, use these findings to influence both public and private decision-making, and allow students to apply their knowledge to real-world data. The institute releases two reports a year, each focused on different aspects of the local economy.
For more information on KIRES, or to see all of their past reports, visit their King Webpage, or contact the directors, Dr. Sam Evans at email@example.com, and Dr. Alexander Brumlik at firstname.lastname@example.org.