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Is NY's Supply-Side Experiment Working? A Preliminary Analysis using County Unemployment Rates

Author

Listed:
  • Lynn B. Snarr

    (Westminster College)

  • Hal Snarr

    (Westminster College)

  • Dan Friesner

    (North Dakota State University)

Abstract

"The State of New York recently enacted business tax reforms. The first legislative act launched the START-UP NY program in 2014. It created tax free enterprise zones throughout the state to incentivize business incubation within, or relocation of existing firms to, the State of New York. In that same year, the state lowered its corporate tax rate state-wide from 7.1% to 6.5% in 2016. We use a difference-in-differences (DID) methodology, evaluated using county-level data, to empirically test whether New York’s recent business tax reforms significantly reduce unemployment, beyond what would exist in the absence of the reforms. We fail to find significant evidence that START-UP NY affects unemployment during the period studied, 2014-2017. We do, however, find evidence suggesting that New York lowering its corporate tax rates in 2016 is associated with a reduction in unemployment (by approximately 90,000 jobs) in 2016 and a smaller reduction (by approximately 25,000 jobs) in 2017."

Suggested Citation

  • Lynn B. Snarr & Hal Snarr & Dan Friesner, 2018. "Is NY's Supply-Side Experiment Working? A Preliminary Analysis using County Unemployment Rates," Review of Economic Analysis, Digital Initiatives at the University of Waterloo Library, vol. 10(3), pages 245-266, May.
  • Handle: RePEc:ren:journl:v:10:y:2018:i:3:p:245-266
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    More about this item

    Keywords

    entrepreneurship; employment; regional economic development;
    All these keywords.

    JEL classification:

    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry

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