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A spatial analysis of employment multipliers in the US

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  • Margherita Gerolimetto

    () (Ca’ Foscari University Venice)

  • Stefano Magrini

    () (Ca’ Foscari University Venice)

Abstract

Abstract The actual effectiveness of employment promotion policies depends on the ability of the intervention at creating new jobs in the targeted sector, but also, to a large extent, on the impact they have on other parts of the local economy. Estimating the latter effect is therefore quite important for regional economic development policies. Along the lines of Moretti (Am Econ Rev Pap Proc 100:373–377, 2010), we present an empirical analysis of local employment multipliers using data on 123 US Metropolitan Statistical Areas over the period 1980–2010. From the methodological point of view, in this work not only endogeneity (via instrumental variables estimates), but also spatial spillovers are taken into account. According to the results, the magnitude of the multiplier could be rather limited. On the other hand, there is clear indication that the impact of these interventions is not fully contained within the local economy and they have a positive effect on closely surrounding ones.

Suggested Citation

  • Margherita Gerolimetto & Stefano Magrini, 2016. "A spatial analysis of employment multipliers in the US," Letters in Spatial and Resource Sciences, Springer, vol. 9(3), pages 277-285, October.
  • Handle: RePEc:spr:lsprsc:v:9:y:2016:i:3:d:10.1007_s12076-015-0157-z
    DOI: 10.1007/s12076-015-0157-z
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    References listed on IDEAS

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    1. Enrico Moretti, 2010. "Local Multipliers," American Economic Review, American Economic Association, vol. 100(2), pages 373-377, May.
    2. Giuseppe Arbia & Francesca Petrarca, 2011. "Effects of MAUP on spatial econometric models," Letters in Spatial and Resource Sciences, Springer, vol. 4(3), pages 173-185, October.
    3. Roback, Jennifer, 1982. "Wages, Rents, and the Quality of Life," Journal of Political Economy, University of Chicago Press, vol. 90(6), pages 1257-1278, December.
    4. Stefano Magrini & Margherita Gerolimetto & Hasan Engin Duran, 2015. "Regional Convergence and Aggregate Business Cycle in the United States," Regional Studies, Taylor & Francis Journals, vol. 49(2), pages 251-272, February.
    5. Kelejian, Harry H. & Prucha, Ingmar R., 2010. "Specification and estimation of spatial autoregressive models with autoregressive and heteroskedastic disturbances," Journal of Econometrics, Elsevier, vol. 157(1), pages 53-67, July.
    6. Giuseppe Arbia, 2001. "articles: Modelling the geography of economic activities on a continuous space," Papers in Regional Science, Springer;Regional Science Association International, vol. 80(4), pages 411-424.
    7. Gary Clyde Hufbauer & Martin Vieiro, 2013. "Corporate Taxation and US MNCs: Ensuring a Competitive Economy," Policy Briefs PB13-9, Peterson Institute for International Economics.
    8. G. de Blasio & C. Menon, 2011. "Local Effects of Manufacturing Employment Growth in Italy," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 70(3), pages 101-112, December.
    9. Harry H. Kelejian & Ingmar R. Prucha, 2008. "Specification and Estimation of Spatial Autoregressive Models with Autoregressive and Heteroskedastic Disturbances," CESifo Working Paper Series 2448, CESifo Group Munich.
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    Cited by:

    1. Cerqua, Augusto & Pellegrini, Guido, 2018. "Local multipliers at work," MPRA Paper 85326, University Library of Munich, Germany.
    2. Licia Ferranna & Margherita Gerolimetto & Stefano Magrini, 2016. "Urban Governance Structure and Wage Disparities across US Metropolitan Areas," Working Papers 2016:26, Department of Economics, University of Venice "Ca' Foscari".
    3. Philippe Frocrain & Pierre-Noël Giraud, 2017. "The evolution of tradable and non-tradable employment: evidence from France," Working Papers hal-01695159, HAL.
    4. Luca Salvati & Margherita Carlucci & Giuseppe Venanzoni, 2017. "Recession, resilience, local labour markets: wealthier is better?," Letters in Spatial and Resource Sciences, Springer, vol. 10(2), pages 177-204, July.

    More about this item

    Keywords

    Local multipliers; Regional policy; Spatial models; Instrumental variable estimation;

    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • C26 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Instrumental Variables (IV) Estimation

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