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Estimating the Benefits of Job Creation from Local Investment Subsidies

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  • K.G. Willis

    (Department of Town & Country Planning at the University of Newcastle upon Tyne)

Abstract

This paper reviews the application of project appraisal techniques to analysing the cost-effectiveness of local investment subsidies (advance factory building). Cost per job measures are shown to be dependent upon the method of assessing the number of jobs created, and the assumptions used in evaluating Exchequer as well as social costs and benefits. If realistic probabilities are adopted about the likelihood of previously unemployed persons obtaining a job other than in the advance factories, then such local investment subsidies are not economically viable in Exchequer terms. Local investment subsidies may be justified on cost-benefit grounds, but even by this criterion, the number of subsidy-created relative to subsidy-diverted jobs is crucial to the decision.

Suggested Citation

  • K.G. Willis, 1985. "Estimating the Benefits of Job Creation from Local Investment Subsidies," Urban Studies, Urban Studies Journal Limited, vol. 22(2), pages 163-177, April.
    • Handle: RePEc:sae:urbstu:v:22:y:1985:i:2:p:163-177
    DOI: 10.1080/00420988520080241
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    References listed on IDEAS

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    Cited by:

    1. D.J. Storey, 1990. "Evaluation of Policies and Measures to Create Local Employment," Urban Studies, Urban Studies Journal Limited, vol. 27(5), pages 669-684, October.
    2. Othmani, Abdelhafidh & Ben Yedder, Nadia & Bakari, Sayef, 2023. "The Cointegration Relationship between Patent, Domestic Investment and Economic Growth in United States of America," MPRA Paper 118245, University Library of Munich, Germany.
    3. Ted K. Bradshaw, 2002. "The Contribution of Small Business Loan Guarantees to Economic Development," Economic Development Quarterly, , vol. 16(4), pages 360-369, November.
    4. Ivan Turok, 1989. "Evaluation and Understanding in Local Economic Policy," Urban Studies, Urban Studies Journal Limited, vol. 26(6), pages 587-606, December.
    5. Paul Coomes & Dennis Olson & John Merchant, 1991. "Using a Metropolitan-area Econometric Model to Analyse Economic Development Proposals," Urban Studies, Urban Studies Journal Limited, vol. 28(3), pages 369-382, June.
    6. Ian C. Thomas & P.J. Drudy, 1987. "The Impact of Factory Development on 'Growth Town' Employment in Mid-Wales," Urban Studies, Urban Studies Journal Limited, vol. 24(5), pages 361-378, October.
    7. Ian C. Thomas & P.J. Drudy, 1988. "Growth Town Employment in Mid-Wales Re-Visited: A Reply," Urban Studies, Urban Studies Journal Limited, vol. 25(6), pages 532-537, December.
    8. K.G. Willis, 1988. "The Impact of Factory Development on 'Growth Town' Employment in Mid-Wales : A Comment," Urban Studies, Urban Studies Journal Limited, vol. 25(6), pages 527-531, December.
    9. Paul Foley, 1992. "Local Economic Policy and Job Creation: A Review of Evaluation Studies," Urban Studies, Urban Studies Journal Limited, vol. 29(3-4), pages 557-598, May.
    10. Tony Bovaird, 1992. "Local Economic Development and the City," Urban Studies, Urban Studies Journal Limited, vol. 29(3-4), pages 343-368, May.
    11. Robert W. Wassmer, 1994. "Can Local Incentives Alter a Metropolitan City's Economic Development?," Urban Studies, Urban Studies Journal Limited, vol. 31(8), pages 1251-1278, October.
    12. Lorenz Blume, 2006. "Local economic policies as determinants of the local business climate: Empirical results from a cross-section analysis among East German municipalities," Regional Studies, Taylor & Francis Journals, vol. 40(4), pages 321-333.
    13. Steve Martin, 1989. "New Jobs in the Inner City: The Employment Impacts of Projects Assisted Under the Urban Development Grant Programme," Urban Studies, Urban Studies Journal Limited, vol. 26(6), pages 627-638, December.

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