Jobless Capital? The Role of Capital Subsidies
Early Career Research Award
The proposed research investigates the mechanisms behind recent estimates that suggest non-tax economic development incentives have either negative or no job creation effects. I exploit variation in structural constraints to isolate the effects of capital subsidies and investigate their influence on capital investment and sectoral composition in US counties 1972-2002. To strengthen identification, the research will also estimate effects for two important subsets of the US (continental) county panels: counties near shared state borders and counties within multi-state MSAs. The research will provide important insight into capital subsidies as a local job creation policy.