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Articles 1 - 28 of 28
Full-Text Articles in Regional Economics
New Evidence On State Fiscal Multipliers: Implications For State Policies, Timothy J. Bartik
New Evidence On State Fiscal Multipliers: Implications For State Policies, Timothy J. Bartik
Upjohn Institute Working Papers
When state and local governments engage in balanced budget changes in taxes and spending, what fiscal multiplier effects do such policies have on creating local jobs? Traditionally, the view has been that possible job-creation effects of such state and local “demand-side” policies are smaller, second-order effects. Such effects might be worthwhile to take into consideration when a state or local government balances its budget during a recession, but the effects were believed to be of modest magnitude, and not of major importance for more general state and local public policies. However, recent estimates of fiscal multiplier effects of state and …
Migration And Housing Price Effects Of Place-Based College Scholarships, Timothy J. Bartik, Nathan Sotherland
Migration And Housing Price Effects Of Place-Based College Scholarships, Timothy J. Bartik, Nathan Sotherland
Upjohn Institute Working Papers
Place-based college scholarships, such as the Kalamazoo Promise, provide students who live in a particular place, and/or who attend a particular school district, with generous college scholarships. An important potential benefit from such “Promise programs” is their short-term effects on local economic development. Generous Promise scholarships provide an incentive for families to locate in a particular place, which may change migration patterns, and potentially boost local employment and housing prices. Using data from the American Community Survey, this paper estimates the average effects of eight relatively generous Promise programs on migration rates and housing prices in their local labor market. …
The Production And Stock Of College Graduates For U.S. States, John V. Winters
The Production And Stock Of College Graduates For U.S. States, John V. Winters
Upjohn Institute Working Papers
The stock of human capital in an area is important for regional economic growth and development. However, highly educated workers are often quite mobile, and there is a concern that public investments in college graduates may not benefit the state if the college graduates leave the state after finishing their education. This paper examines the relationship between the production of college graduates from a state and the stock of college graduates residing in the state using microdata from the decennial census and American Community Survey. The relationship is examined across states and across cohorts within states. The descriptive analysis suggests …
Jobless Capital? The Role Of Capital Subsidies, Carlianne E. Patrick
Jobless Capital? The Role Of Capital Subsidies, Carlianne E. Patrick
Upjohn Institute Working Papers
Using tax abatements, financial incentives, and public investments to attract (or retain) firms is the primary economic development tool for many local governments. Often local job creation policies focus on increasing capital through grants, low-interest financing, and other economic development incentives. Theory predicts that capital subsidies induce firm behaviors that limit their job creation effects. This paper employs the Incentives Environment Index, constructed from state constitutional provisions that limit and structure the ability of state and local governmental entities to aid private enterprises, and five-year county panels to test theoretical predictions on county capital expenditure and input mixes as well …
How Effects Of Local Labor Demand Shocks Vary With Local Labor Market Conditions, Timothy J. Bartik
How Effects Of Local Labor Demand Shocks Vary With Local Labor Market Conditions, Timothy J. Bartik
Upjohn Institute Working Papers
This paper estimates how effects of shocks to local labor demand on local labor market outcomes vary with initial local economic conditions. The data are on U.S. metro areas from 1979 to 2011. The paper finds that demand shocks to local job growth have greater effects in reducing local unemployment rates if the local economy is initially depressed than if the local economy is booming. Demand shocks have greater effects on local wage rates if the local unemployment rate is initially low, but lesser effects if local job growth is initially high. These different effects of local demand shocks imply …
State Incentives For Innovation, Star Scientists, And Jobs: Evidence From Biotech, Enrico Moretti, Daniel J. Wilson
State Incentives For Innovation, Star Scientists, And Jobs: Evidence From Biotech, Enrico Moretti, Daniel J. Wilson
Upjohn Institute Working Papers
We evaluate the effects of state-provided financial incentives for biotech companies, which are part of a growing trend of placed-based policies designed to spur innovation clusters. We estimate that the adoption of subsidies for biotech employers by a state raises the number of star biotech scientists in that state by about 15 percent over a three-year period. A 10 percent decline in the user cost of capital induced by an increase in R&D tax incentives raises the number of stars by 22 percent. Most of the gains are due to the relocation of star scientists to adopting states, with limited …
Simulating The Effects Of Michigan's Mega Tax Credit Program On Job Creation And Fiscal Benefits, Timothy J. Bartik, George A. Erickcek
Simulating The Effects Of Michigan's Mega Tax Credit Program On Job Creation And Fiscal Benefits, Timothy J. Bartik, George A. Erickcek
Upjohn Institute Working Papers
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.
Mediating Incentive Use: A Time-Series Assessment Of Economic Development Deals In North Carolina, T. William Lester, Nichola Lowe, Allan Freyer
Mediating Incentive Use: A Time-Series Assessment Of Economic Development Deals In North Carolina, T. William Lester, Nichola Lowe, Allan Freyer
Upjohn Institute Working Papers
State incentive granting for the purpose of firm retention or recruitment remains highly controversial and is often portrayed as antithetical to long-range economic development planning. This paper uses quasi-experimental methods to measure the impact of state-level economic development incentives on employment growth at the establishment level in North Carolina. Using North Carolina’s rich history of strategic planning and sector-based economic development as a backdrop, we develop a theory of sectoral “mediation.” This enables us to compare the effectiveness of incentives offered in mediated and nonmediated industries and show that when incentives are coupled with sectoral economic development efforts they generate …
The Employment And Fiscal Effects Of Michigan's Mega Tax Credit Program, Timothy J. Bartik, George A. Erickcek
The Employment And Fiscal Effects Of Michigan's Mega Tax Credit Program, Timothy J. Bartik, George A. Erickcek
Upjohn Institute Working Papers
This paper estimates that Michigan's MEGA tax credit program to attract and retain businesses has large employment and fiscal benefits. MEGA provides discretionary tax credits to businesses, with the tax credit tied to the personal income taxes paid by employees on the new or retained jobs. We estimate the economic effects of MEGA using the Upjohn Institute's REMI model, and the research literature on how business location decisions respond to taxes. We estimate the fiscal effects of MEGA based on the research literature on how government spending and revenue respond to state personal income and population. The estimates suggest a …
What Should Michigan Be Doing To Promote Long-Run Economic Development?, Timothy J. Bartik
What Should Michigan Be Doing To Promote Long-Run Economic Development?, Timothy J. Bartik
Upjohn Institute Working Papers
This paper argues that Michigan can take cost-effective actions to significantly improve the primary state economic development goal: higher per capita income of Michigan's residents. Higher per capita income of Michigan's residents can be achieved through state policy actions that use cost-effective means to either lower the marginal costs of businesses that expand in the state, or boost the skills of state residents. In this paper, I offer eight ideas for how to lower marginal business costs and boost skills. Four of these ideas focus on lowering marginal business costs. Four other ideas focus on boosting skills. For each of …
What Should Eda Fund? Developing A Model For Pre-Assessment Of Economic Development Investments, Brad R. Watts, George A. Erickcek, Jacob Duritsky, Kevin O'Brien, Claudette Robey, Jim Robey
What Should Eda Fund? Developing A Model For Pre-Assessment Of Economic Development Investments, Brad R. Watts, George A. Erickcek, Jacob Duritsky, Kevin O'Brien, Claudette Robey, Jim Robey
Upjohn Institute Working Papers
This paper describes the completion of a "comprehensive study of regionalism" that was conducted by a joint team of economists and economic development specialists for the Economic Development Administration (EDA). The project consisted of two main activities: an examination of the factors associated with economic development success and the creation of a practical interactive tool for EDA project assessment and comparison. Findings from surveys, interviews, and project case studies are discussed in terms of their support for a positive relationship between successful economic development efforts and factors such as leadership and private investment. Also, the authors discuss the creation of …
What Proportion Of Children Stay In The Same Location As Adults, And How Does This Vary Across Location And Groups?, Timothy J. Bartik
What Proportion Of Children Stay In The Same Location As Adults, And How Does This Vary Across Location And Groups?, Timothy J. Bartik
Upjohn Institute Working Papers
This paper provides new information on what proportion of individuals spend their adult work lives in their childhood metropolitan area or state. I also examine how this proportion varies across different demographic groups, and with the size and growth rate of the metropolitan area. I find that the proportion of individuals who spend most of their adulthood in their childhood metropolitan area is surprisingly high. Furthermore, this proportion does not go down as much as one might think for smaller or slower-growing metropolitan areas, or for college-educated persons. These findings imply that state and local investments in children may pay …
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
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
Upjohn Institute Working Papers
This paper examines the effects of expansions in higher educational institutions and the medical service industry on the economic development of a metropolitan area. This examination pulls together previous research and provides some new empirical evidence. We provide quantitative evidence of the magnitude of economic effects of higher education and medical service industries that occur through the mechanism of providing some export-base demand stimulus to a metropolitan economy. We also provide quantitative evidence on how much higher education institutions can boost a metropolitan economy through increasing the educational attainment of local residence. We estimate that medical service industries pay above …
How Do The Effects Of Local Growth On Employment Rates Vary With Initial Labor Market Conditions?, Timothy J. Bartik
How Do The Effects Of Local Growth On Employment Rates Vary With Initial Labor Market Conditions?, Timothy J. Bartik
Upjohn Institute Working Papers
This paper examines how the effects of increased employment growth on a metropolitan area's employment to population ratio varies with the initial tightness of the metropolitan area's labor market. This examination is relevant to evaluating the benefits of local economic development policies in different metropolitan areas. Much of the benefits of such policies are in higher employment rates. The empirical estimates suggest that the effectiveness of employment growth in increasing the employment to population ratio is lower in metropolitan areas with "tight" labor markets. In addition, some estimates suggest that growth has the greatest long-run effects on the employment to …
Increasing The Economic Development Benefits Of Higher Education In Michigan, Timothy J. Bartik
Increasing The Economic Development Benefits Of Higher Education In Michigan, Timothy J. Bartik
Upjohn Institute Working Papers
This paper considers how a state such as Michigan can increase the economic development benefits of higher education. Research evidence suggests that higher education increases local economic development principally by increasing the quality of the local workforce, and secondarily by increasing local innovative ideas. These economic development benefits of higher education can be increased by: 1) competent management of conventional economic development programs that focus on business attraction and retention; 2) policies that focus on increasing local job skills by educating the state's residents, as opposed to attracting in-migrants; 3) policies that address specific "market failures" in how higher education …
Incentive Solutions, Timothy J. Bartik
Incentive Solutions, Timothy J. Bartik
Upjohn Institute Working Papers
This paper reviews the research literature relevant to economic development incentives provided by state and local governments, and recommends reforms in these incentives. I argue that the main problem with current incentive policies is that state and local governments often provide incentives that are not in the best interest of that state or local area, for example that are excessively costly per job created, or that provide jobs that do not improve the job opportunities of local residents. I suggest that reforms should be "bottom-up" rather than "top-down." Regulation of incentives by the federal government, or by international trade treaties, …
Thoughts On American Manufacturing Decline And Revitalization, Timothy J. Bartik
Thoughts On American Manufacturing Decline And Revitalization, Timothy J. Bartik
Upjohn Institute Working Papers
The recent decline in American manufacturing probably reflects long-run problems. A sensible approach to revitalizing American manufacturing would focus on overcoming inefficiencies in the development of manufacturing, such as problems in small- and medium-sized manufacturers getting information about deploying new technologies. This approach to revitalizing manufacturing can best be implemented through federal efforts to encourage and support state and local economic development policies that help enhance manufacturing productivity. A decentralized approach to the revitalization of manufacturing encourages a variety of creative policies, is adaptable to local conditions, and is consistent with American political traditions.
Local Economic Development Policies, Timothy J. Bartik
Local Economic Development Policies, Timothy J. Bartik
Upjohn Institute Working Papers
This chapter seeks to provide useful advice for local government policy towards economic development programs. The chapter: reviews the size and scope of local economic development programs in the United States; critically analyzes the various rationales offered for these programs; makes recommendations for what local policy should do about business attraction and incentives, business retention, new business development, high technology development, brownfield development, distressed neighborhoods, and downtowns; and discusses how local economic development programs should be organized, managed, and evaluated.
Evaluating The Impacts Of Local Economic Development Policies On Local Economic Outcomes: What Has Been Done And What Is Doable?, Timothy J. Bartik
Evaluating The Impacts Of Local Economic Development Policies On Local Economic Outcomes: What Has Been Done And What Is Doable?, Timothy J. Bartik
Upjohn Institute Working Papers
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 …
The Role Of Partnerships In Economic Development And Labor Markets In The United States, Randall W. Eberts, George A. Erickcek
The Role Of Partnerships In Economic Development And Labor Markets In The United States, Randall W. Eberts, George A. Erickcek
Upjohn Institute Working Papers
This paper describes the role of local partnerships in the delivery of workforce and economic development services in the United States. Partnerships include both public and private organizations and increasingly depend upon local business people for leadership. With grassroots organizations traditionally taking the lead in addressing local issues and a long history of decentralized government, it is not surprising that a labyrinth of partnerships characterize the provision of public services. This paper grew out of a study tour that the Upjohn Institute conducted in conjunction with the Local Employment and Economic Development (LEED) Committee of the Organization for Economic Co-Operation …
Black-White Segregation, Discrimination, And Home Ownership, Kelly Derango
Black-White Segregation, Discrimination, And Home Ownership, Kelly Derango
Upjohn Institute Working Papers
The effect of discrimination on black-white racial segregation is studied using a confidential supplement of the Panel Study of Income Dynamics (PSID). Audit studies reveal that the rate of discrimination in rental housing is substantially higher than in owner-occupied housing. Thus, a variable indicating home ownership is used to proxy for the discrimination rate faced by blacks. The fixed-effects estimates of segregation imply that home ownership is associated with a decline in black-white segregation. This effect decreases slightly at higher income levels but increases substantially with the education of the head of household. Evidence is presented that the effect of …
Aggregate Effects In Local Labor Markets Of Supply And Demand Shocks, Timothy J. Bartik
Aggregate Effects In Local Labor Markets Of Supply And Demand Shocks, Timothy J. Bartik
Upjohn Institute Working Papers
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 …
Economic Development Strategies, Timothy J. Bartik
Economic Development Strategies, Timothy J. Bartik
Upjohn Institute Working Papers
This paper provides a guide to economic development policies for local government managers. Local economic development policies today include not only tax subsidies for branch plants, but also job training to provide workers to businesses, advice and support services for potential entrepreneurs, and extension services to help businesses modernize and export. To help local government managers, this paper suggests a number of guiding principles, including: local economic development should be pursued cooperatively across the local labor market; economic development programs should consider the quality of jobs created; tax subsidies are expensive per job created; development subsidies are more effective if …
Can Economic Development Programs Be Evaluated?, Timothy J. Bartik, Richard D. Bingham
Can Economic Development Programs Be Evaluated?, Timothy J. Bartik, Richard D. Bingham
Upjohn Institute Working Papers
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 …
What Should The Federal Government Be Doing About Urban Economic Development?, Timothy J. Bartik
What Should The Federal Government Be Doing About Urban Economic Development?, Timothy J. Bartik
Upjohn Institute Working Papers
The federal government should focus its policies towards economic development on areas in which the federal government has some unique advantages. Federal policy should: (1) discourage financial subsidies to specific large firms by state and local governments; (2) expand the federal role in economic development services in which national action has some special advantages, such as developing information on foreign markets, encouraging large national banks to be more involved in economic development, supporting the development of the "Information Superhighway," and encouraging new technology development; (3) provide modest support for state and local efforts to increase business productivity through technology extension …
Federal Policy Towards State And Local Economic Development In The 1990s, Timothy J. Bartik
Federal Policy Towards State And Local Economic Development In The 1990s, Timothy J. Bartik
Upjohn Institute Working Papers
This paper suggests new federal policies towards state and local economic development assistance to business. I argue that there is some evidence that these programs can be effective in encouraging business growth and helping the unemployed. But state and local governments do not have the right incentives to adequately pursue national goals through economic development programs. State and local governments are not inclined to do quality evaluations of their programs and tend to favor business attraction programs over programs that might increase U.S. business productivity. In addition, it is unclear whether economic development efforts are most vigorously pursued by economically …
The Effects Of Metropolitan Job Growth On The Size Distribution Of Family Income, Timothy J. Bartik
The Effects Of Metropolitan Job Growth On The Size Distribution Of Family Income, Timothy J. Bartik
Upjohn Institute Working Papers
This paper examines how a metropolitan area's job growth affects its income distribution. The research uses annual Current Population Survey data on the income distribution in different metropolitan areas from 1979 through 1988. Faster metropolitan job growth increases real family income in the lowest income quintile by a significantly greater percentage than for the average family. Metropolitan job growth also increases the value of property owned by upper income quintiles, but property value effects are not large enough to offset the progressive effects of growth on labor income. Simulations indicate that economic development programs to increase metropolitan job growth will …
Maximum Score Estimates Of The Determinants Of Residential Mobility: Implications For The Value Of Residential Attachment And Neighborhood Amenities, Timothy J. Bartik, J. S. Butler, Jin-Tan Liu
Maximum Score Estimates Of The Determinants Of Residential Mobility: Implications For The Value Of Residential Attachment And Neighborhood Amenities, Timothy J. Bartik, J. S. Butler, Jin-Tan Liu
Upjohn Institute Working Papers
This paper examines the determinants of the decision of low-income renters to move out of their current dwelling. Maximum score estimation is shown to be superior to ordinary discrete choice estimation techniques (probit, logit) for this problem, and for similar discrete choices that require revering a previously optimal decision. The estimation reveals psychological costs from moving for typical low income renters of at least 8% of their income ; these costs are even higher for older, longer tenure, or minority households. Policies that displace low income renters will have large social costs. In addition, the estimation results are used to …