Expanding the Economic Base Model to Include Nonwage Income

As baby boomers retire over the next decade, the size of the population relying primari-ly on nonwage income will likely grow considerably. This study argues that it is important to include these income sources in descriptions of regional economies. I modify the location quotient method of calculating the base multiplier to compare the effect of nonwage income with wage and salary income. The location quotient in the expanded model changes from the traditional model by a constant factor related to the relative size of the nonwage income in the region. I demonstrate the model in six commuting zones with different compositions of personal income.