THE ECONOMIC IMPACTS OF AMERICAN INDIAN CASINOS

Abstract

This dissertation analyzes the impact of American Indian casinos on social and economic outcomes of reservation residents using restrict-use data from 1990 and 2000 census long form. Federal legislature in 1988 allowed Indian tribes in certain states to open casinos and since then, over 400 casinos have opened, 240 of which have Las Vegas-style games. I demonstrate that casino operations increased employment rates and wages. The impact was primarily for Indians and larger for low-skilled workers among Indians. Employment rates of Indians increased by 6.0 percentage points for those with less than high school degree and by 5.5 percentage points for those with high school degree. Young Indian adults responded by dropping out of high school and not enrolling college even though many tribes had generous college tuition subsidy programs. High school enrollment rates fell by 4.8 percentage points for 18 year old Indian males, by 5.1 and 8.7 percentage points for Indian females aged 17 and 18. The high school graduation rate of those aged 20-24 fell by 9.6 percentage points and by 11.5 percentage points for Indian males and for Indian females, respectively. College entrance rate fell by 5.3 percentage points and by 8.8 percentage points for young Indian males and Indian females, respectively.

Economic changes on gaming reservations also altered the incentives to marry and have children. Ever married rates of males increased by 2.6 to 5.0 percentage points for those aged 18 to 21. Ever married rates of females did not show any statistically significant changes except among 24 year old Indians. The fraction of females (aged 18 to 25) having children fell for both Indians and non-Indians by 3.4 to 3.7 percentage points.