Benefits and Costs for Chattanooga Residents of Incorporating Training into Economic Development Strategies

Authors

• Timothy J. Bartik, W.E. Upjohn Institute for Employment ResearchFollow
• Iryna V. Lendel, W.E. Upjohn Institute for Employment ResearchFollow
• Sevrin Williams, W.E. Upjohn Institute for Employment ResearchFollow

Upjohn Author ORCID Identifier

https://orcid.org/0000-0002-6238-8181

https://orcid.org/0009-0001-0436-1618

https://orcid.org/0009-0008-4840-887X

Series

Upjohn Institute Technical Report No. 26-060

DOI

10.17848/tr26-060

Issue Date

June 2026

Abstract

This report evaluates the benefit-cost tradeoffs of adding a workforce training component to Chattanooga's economic development incentive packages, using the Bartik Benefit-Cost Model of Business Incentives. Focusing on hypothetical projects across seven industries, the analysis compares the present value of training costs against resulting gains in residents' per capita income over a 20-year horizon. Findings show that training, layered onto existing PILOT-based tax incentives, delivers benefits more than 25 times its costs—driven by training's greater cost-effectiveness in inducing business location decisions and its stronger tendency to direct new jobs toward local residents. While training is not self-financing from a city budget perspective, it generates substantial fiscal returns statewide. These outcomes depend on training quality, so the report recommends robust evaluation mechanisms including tracking trainee employment and earnings outcomes and incorporating firm feedback to ensure and continually improve program effectiveness.

Sponsorship

City of Chattanooga

Subject Areas

ECONOMIC DEVELOPMENT; Local labor markets; Regional policy and planning; WORKFORCE DEVELOPMENT; Public training programs