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Simulating the Effects of the Tax Credit Program of the Michigan Economic Growth Authority on Job Creation and Fiscal Benefits

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  • Timothy J. Bartik
  • George Erickcek

Abstract

This article simulates job and fiscal impacts of the Michigan Economic Growth Authority’s tax credit program for job creation, commonly called “MEGA.†Under plausible assumptions about how such credits affect business location decisions, the net costs per job created of the MEGA program are simulated to be of modest size. The job creation impacts of MEGA are simulated to be considerably larger than devoting similar dollar resources to general business tax cuts. The simulation methodology developed here is applicable to incentives in other states.

Suggested Citation

  • Timothy J. Bartik & George Erickcek, 2014. "Simulating the Effects of the Tax Credit Program of the Michigan Economic Growth Authority on Job Creation and Fiscal Benefits," Economic Development Quarterly, , vol. 28(4), pages 314-327, November.
  • Handle: RePEc:sae:ecdequ:v:28:y:2014:i:4:p:314-327
    DOI: 10.1177/0891242414548893
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    Cited by:

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    2. Michael Wasylenko, 2020. "New York State Economic Status of Regions and Development Programs," Center for Policy Research Working Papers 220, Center for Policy Research, Maxwell School, Syracuse University.
    3. John Dove & Daniel Sutter, 2018. "Is There a Tradeoff Between Economic Development Incentives and Economic Freedom? Evidence from the US States," The Review of Regional Studies, Southern Regional Science Association, vol. 48(1), pages 55-69, Spring.
    4. Carlianne Patrick & Heather M. Stephens, 2020. "Incentivizing the Missing Middle: The Role of Economic Development Policy," Economic Development Quarterly, , vol. 34(2), pages 154-170, May.
    5. Nahid Sultana, 2022. "Machine leaching approaches to assess public attitude towards value-added tax in Saudi Arabia," SN Business & Economics, Springer, vol. 2(9), pages 1-18, September.
    6. Benjamin Austin & Edward Glaeser & Lawrence Summers, 2018. "Jobs for the Heartland: Place-Based Policies in 21st-Century America," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 49(1 (Spring), pages 151-255.
    7. Timothy J. Bartik, 2018. ""But For" Percentages for Economic Development Incentives: What percentage estimates are plausible based on the research literature?," Upjohn Working Papers 18-289, W.E. Upjohn Institute for Employment Research.
    8. Xue Zhang & Mildred E. Warner & George C. Homsy, 2017. "Environment, Equity, and Economic Development Goals: Understanding Differences in Local Economic Development Strategies," Economic Development Quarterly, , vol. 31(3), pages 196-209, August.

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    More about this item

    Keywords

    incentives; job creation; fiscal impact; business taxes;
    All these keywords.

    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • R28 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Government Policy
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy
    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General

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