Wall, Howard (2013): Robbing Peter to Pay Paul: The Employment Effects of the Missouri Quality Jobs Program.
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Abstract
This paper is an assessment of the employment effects of the Missouri Quality Jobs Program, which awards tax credits to businesses so as to spur state job creation. According to the Missouri Department of Economic Development, which adminsters the program, the tax credits rewarded under the program have, created more than 10,000 new jobs, so far, and will generate a net increase of more than 50,000 jobs by 2020. My estimates indicate, however, that the program simply transfers jobs to subsidized projects from the rest of the economy, while also creating labor-market distortions. My baseline estimates indicate that there were about 5,000 fewer private-sector jobs in Missouri in 2011 because of the program. Alternative estimates suggest even larger job losses. The most-likely best-case scenario for the long run is that the hundreds of millions of dollars transferred to businesses under the program will have led to no net change in state employment.
Item Type: | MPRA Paper |
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Original Title: | Robbing Peter to Pay Paul: The Employment Effects of the Missouri Quality Jobs Program |
Language: | English |
Keywords: | state tax credits, missouri quality jobs program |
Subjects: | R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R0 - General > R00 - General R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R5 - Regional Government Analysis > R58 - Regional Development Planning and Policy |
Item ID: | 50605 |
Depositing User: | Howard J. Wall |
Date Deposited: | 14 Oct 2013 09:15 |
Last Modified: | 28 Sep 2019 04:47 |
References: | Bartik, Timothy J., 2005, “Solving the Problems of Economic Development,” Growth and Change, 36(2), pp. 139-166. Bartik, Timothy J. and Erickcek, George A., 2010, “The Employment and Fiscal Effects of Michigan's MEGA Tax Credit Program,” Upjohn Institute Working Paper No. 10-164. Faulk, Dagney, 2002, “Do State Economic Development Incentives Create Jobs? An Analysis of State Employment Tax Credits,” National Tax Journal, 55(2), pp. 263-280. Gabe, Todd M. and Kraybill, David S., 2002, “The Effect of State Economic Development Incentives on Employment Growth of Establishments,” Journal of Regional Science, 42(4), pp. 703-730. Hyatt, Henry and McEntarfer, Erika, 2012, “Job to Job Flows and the Business Cycle,” U.S. Census Bureau, Center for Economic Studies Discussion Series 12-04. LaFaive, Michael D. and Hicks, Michael, 2011, “The Influence of Targeted Economic Development Tax Incentives on County Economic Growth: Evidence from Michigan’s MEGA Credits,” Economic Development Quarterly, 25(2), pp. 193-205. LaFaive, Michael and Hohman, James, 2009, “The Michigan Economic Development Corporation: A Review and Analysis,” Mackinac Center for Public Policy. Mills, Edwin S., 1993, “The Misuse of Regional Economic Models,” Cato Journal, 13(1), pp. 29-39. Peters, Alan and Fisher, Peter, 2004, “The Failures of Economic Development Incentives,” Journal of the American Planning Association, 70(1), pp. 27-37. Rickman, Dan S., 2010, “Modern Macroeconomics and Regional Economic Modeling,” Journal of Regional Science, 50(1), pp. 23-41. Wall, Howard J., 2011, “Tax Credits as a Tool of State Economic Development Policy,” Show-Me Institute Public Policy Study Number 30, November 1, 2011. Warner, Mildred and Zheng, Lingwen, 2013, “Business Incentive Adoption in the Recession,” Economic Development Quarterly, forthcoming. Zheng, Lingwen and Warner, Mildred, 2010, “Business Incentive Use Among U.S. Local Governments: A Story of Accountability and Policy Learning,” Economic Development Quarterly, 24(4), pp. 325-336. |
URI: | https://mpra.ub.uni-muenchen.de/id/eprint/50605 |