ABSTRACTDespite the fact that nonemployment income makes up approximately one‐third of all personal income, its impact on local area economies has not been closely examined. This study uses Michigan county data to examine the impact of nonemployment income on nonbasic income over a twenty‐seven‐year period. This impact is compared to the impact of basic income by employing regression analysis to estimate comparative multiplier effects for both types of income. Nonemployment income is found to have a significant impact on nonbasic income, particularly in metropolitan and nonmetropolitan urban counties, where its impact appears to be stronger than that of basic i