Social and Behavioral Sciences Commons^™

Economic Impact Of Various Budgetary Policy Options For The State Of Michigan To Resolve Its Budget Deficit For Fy 2004, Timothy J. Bartik, George A. Erickcek

Timothy J. Bartik

The State of Michigan is facing a $925 million budget deficit in Fiscal Year 2004 which began in October 2003. This research brief summarizes the findings of an analysis of the potential economic impacts to the state's economy of the following three budgetary policy options:

1. Eliminate the deficit by cutting state spending by $925 million. 2. Raise sufficient revenues to balance the state's budget by increasing the state's personal income tax rate to an estimated 4.7 percent. 3. Delay for one year the scheduled roll back of the state's personal income tax rate from 4.0 percent to 3.9 percent. …

Can Economic Development Programs Be Evaluated?, Timothy J. Bartik, Richard D. Bingham

Timothy J. Bartik

The question addressed in this paper seems simple: Can economic development programs be evaluated? But the answer is not simple because of the nature of evaluation. To determine a program's effectiveness requires a sophisticated evaluation because it requires the evaluator to distinguish changes due to the program from changes due to nonprogram factors. The evaluator must focus on the outcomes caused by the program rather than the program's procedures. Evaluations can be divided into two categories--process or formative evaluations and outcome, impact, or summative evaluations. Process evaluations focus on how a program is delivered. Impact evaluations focus on the program's …

Including Jobs In Benefit-Cost Analysis, Timothy J. Bartik

Timothy J. Bartik

Public policies may affect employment by directly creating jobs, facilitating job creation, or augmenting labor supply. In labor markets with high unemployment, such employment changes may have significant net efficiency benefits, which should be included in benefit-cost analyses.
The research literature offers diverse recommendations on measuring employment benefits. Many of the recommendations rely on arbitrary assumptions. The resulting employment benefit estimates vary widely.
This paper reviews this literature, and offers recommendations on how to better measure employment benefits using estimable parameters. Guidance is provided on measuring policy-induced labor demand, estimating the demand shock’s impact on labor market outcomes, and translating …

Fighting Poverty With Labor Demand Policies, Timothy J. Bartik

Timothy J. Bartik

No abstract provided.

The Revitalization Of Older Industrial Cities: A Review Essay Of Retooling For Growth, Timothy J. Bartik

Timothy J. Bartik

This review essay debates the policy issues raised by the book Retooling for Growth: Building a 21st Century Economy in America's Older Industrial Areas, edited by Richard M. McGahey and Jennifer S. Vey (Brookings Institution Press, 2008). I argue that the main rationale for adopting policies to revitalize older industrial cities is to improve the per capita earnings of urban residents. Therefore, urban economic development policy should be seen as urban labor market policy. Increasing city residents' earnings requires progress on two fronts: increasing metropolitan labor demand; increasing the quantity and quality of the effective labor supply of city residents …

Evaluating The Impacts Of Local Economic Development Policies On Local Economic Outcomes: What Has Been Done And What Is Doable?, Timothy J. Bartik

Timothy J. Bartik

This paper argues that more rigorous evaluations of local economic development policies are feasible. Programs that aid selected small firms can be rigorously evaluated using an experimental approach, without excluding firms from assistance, by randomly assigning some firms to receive more intense marketing efforts by the program. Programs that aid distressed local areas can be rigorously evaluated by random assignment of the program among eligible distressed areas. If an experiment cannot be done, a variety of statistical approaches can be used to compare firms or areas that use the program with comparison groups of firms or areas that do not …

Aggregate Effects In Local Labor Markets Of Supply And Demand Shocks, Timothy J. Bartik

Timothy J. Bartik

Anti-poverty policy in the U.S. has emphasized labor supply policies, such as welfare reform or job training. Anti-poverty policy in the U.S. has not emphasized policies to increase labor demand for the poor, such as public employment or subsidizing private employers to hire the poor. What are the aggregate effects of such policies on wages and unemployment of different groups? This paper estimates and simulates a model with several types of labor, using data from the Current Population Survey on state labor markets. The simulations suggest that forcing more disadvantaged persons into the labor market can displace many other persons …

Taking Preschool Education Seriously As An Economic Development Program: Effects On Jobs And Earnings Of State Residents Compared To Traditional Economic Development Programs, Timothy J. Bartik

Timothy J. Bartik

No abstract provided.

Simulating The Effects Of Michigan's Mega Tax Credit Program On Job Creation And Fiscal Benefits, Timothy J. Bartik, George A. Erickcek

Timothy J. Bartik

This paper simulates job and fiscal impacts of Michigan’s MEGA tax credit program for job creation. Under plausible assumptions about how such credits affect business location decisions, the net costs per job created of the MEGA program are simulated to be of modest size. The job creation impacts of MEGA are simulated to be considerably larger than devoting similar dollar resources to general business tax cuts. The simulation methodology developed here is applicable to incentives in other states.

An Economic Opportunity Concept For The Northside Of The City Of Kalamazoo, Timothy J. Bartik, George A. Erickcek

Timothy J. Bartik

No abstract provided.

Instrumental Variable Estimates Of The Labor Market Spillover Effects Of Welfare Reform, Timothy J. Bartik

Timothy J. Bartik

By increasing the labor supply of welfare recipients, welfare reform may reduce wages and increase unemployment among other less-educated groups. These "spillover effects" are difficult to estimate because welfare caseloads decrease in response to improvements in the economy, which leads caseload reductions to be associated with improvements in labor market outcomes. This paper corrects for the endogeneity of caseloads by using instruments that reflect policy. The estimates suggest that welfare reform has significant spillover effects: welfare reform reduces employment of male high school dropouts, and reduces wages of single mothers and male high school dropouts.

The Effects Of Local Labor Demand On Individual Labor Market Outcomes For Different Demographic Groups And The Poor, Timothy J. Bartik

Timothy J. Bartik

The contribution of this paper is to use panel data on individuals (specifically, data from the Panel Survey on Income Dynamics) to examine how local demand conditions affect the economic well-being of disadvantaged groups and the poor. Previous research on local labor demand conditions uses data from a single cross-section of local economies, or a time-series of cross-sections of regions. With such data, estimated effects of local labor demand conditions on average labor market outcomes might be attributable to changes in local population composition, as we would expect local demand conditions to change in- and out-migration patterns. Because panel data …

Thinking About Local Living Wage Requirements, Timothy J. Bartik

Timothy J. Bartik

This paper reviews what we currently know about the benefits and costs of different varieties of a "living wage": a local government requirement, now adopted by over 50 local governments, for wages above the federal minimum imposed on employers with some financial link to the local government. The review includes economic theory, empirical research on local labor markets, and empirical research on the living wage. The paper concludes that moderate living wage requirements applied to the local government's own employees, and contractors' and grantees' employees who are funded by the local government, may do more good than harm. Excessive living …

Higher Education, The Health Care Industry And Metropolitan Regional Economic Development: What Can "Eds & Meds" Do For The Economic Fortunes Of A Metro Area’S Residents?, Timothy J. Bartik, George A. Erickcek

Timothy J. Bartik

No abstract provided.

Employment As A "Solution" To Welfare: Challenges Over The Next Ten Years, Timothy J. Bartik

Timothy J. Bartik

No abstract provided.

The New Jobs Tax Credit: A Tested Way To Fight High Unemployment, Timothy J. Bartik

Timothy J. Bartik

No abstract provided.