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Do big shifts in economic development incentives attract people?

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Listed:
  • Duan, Huiqiong
  • Rogers, Cynthia
  • Wang, Jia
  • Yuan, Weici

Abstract

State and local governments use economic development incentives (EDI) extensively to promote employment and economic growth. Research suggests that new jobs may go primarily to in-migrants rather than existing workers, which raises questions about who benefits from incentivizing employment (Bartik, 1993). Using a prominent national incentives database, we use event-study and regression frameworks to investigate the impacts of large, abrupt changes in state-level EDI programs on migration. Our results suggest increased net in-migration during the first year after a large change in EDI policy. We find no evidence of employment growth impacts.

Suggested Citation

  • Duan, Huiqiong & Rogers, Cynthia & Wang, Jia & Yuan, Weici, 2024. "Do big shifts in economic development incentives attract people?," Economics Letters, Elsevier, vol. 234(C).
    • Handle: RePEc:eee:ecolet:v:234:y:2024:i:c:s0165176523004779
    DOI: 10.1016/j.econlet.2023.111451
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    References listed on IDEAS

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    1. Goodman, D. Jay, 2003. "Are Economic Development Incentives Worth it? A Computable General Equilibirum Analysis of Pueblo, Colorado's Efforts to Attract Business," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 33(1), pages 1-13.
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    More about this item

    Keywords

    Economic development incentives; Migration; Job creation;
    All these keywords.

    JEL classification:

    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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